It's like saying if engineers had wheels and engines laying around everywhere, nobody would have thought of connecting them together and making a car without a government grant. (I can tell you for a fact that the first thing any engineer does with an engine and wheels is find a way to put them together!)
The Arpanet also kinda went nowhere until the restrictions on commercial use of it were lifted.
But they didn't. I mean, if government projects lag behind private sector projects, why didn't we have ARPANET going nowhere while some private sector project jumped ahead? Even if you think we would have gotten their eventually (debatable), we can at the very least say that the government project got us there sooner.
Local networks run on the Ethernet protocol, developed by Xerox, and shows that an excellent network protocol does not require a government grant. And without Ethernet, there would have been Token Ring by IBM, or Token Bus by GM.
Wasn't it already made better with socialism? Do you not believe that things like ARPANET significantly contributed to the successes we have today?