Competition is not the only feedback loop. With public companies, they're also subject to the usual democratic channels - sometimes less directly, but still. With private companies, you only get that as a shareholder, and even then in practice you have a few people holding the controlling stock.

I'm not sure that this is absolutely true - in the American experience it has been a consistent experience; but in other countries there have been state owned monopolies that blow Comcast out of the water.

There are some successful state-owned corporations, but it's definitely an exception to the rule.

so what's the difference? is it the same reason as why healthcare sucks in america?

Regulatory capture and ineffectual politicians. If politicians pay no heed to the civil service, the civil service has no impetus to improve.

Have there been any private but cooperatively-owned ISPs, like a credit union? That seems like another possible solution.