Again, the issue here is management; an unbiased, purely objective regulator experiencing no benefit from illegitimate actions would keep the existing system working - but humans are still part of it. So is another layer of regulation to make sure the regulators are doing their jobs really necessary? Wouldn't it make more sense to change the system's structure to support effective regulation rather than add another layer of the same?
I don't think the issue is management. It's about incentive. Private firms fall under the same problems of human management that public ones do, because of their human fallibility, by your characterization. The question is what is the driver of decision-making that is most responsive to actual human misery? "The bottom line" surely perpetuates this misery when the interests of the meek do not align with the interests of the rich.
Any representation, however broken, is better than none.
In the US, specifically, the private sector worries about public opinion if it affects profits. That happens when people are both 1) wise to the problem, and 2) manage to find a way to undermine profits for their personal needs (
which is very, very difficult to do). The public sector worries about public opinion when
people simply show up on their door, physically. The representative system, however broken,
requires positive public opinion to function. The unrepresentative "free market" only requires ignorant buyers, and they spend
enormous amounts to make sure that ignorance abounds.
Don't get me wrong. Bureaucracy sucks, hard. But you can protest bad bureaucratic decisions and see large-scale policy change and protection. When you successfully boycott business, all you get is "less bad."