>There's tons of waste in all human endeavor

I believe the argument stems from the difference between wasting your own money vs. wasting tax payer money.

>but I haven't seen any evidence that government is particularly good or bad

There's plenty of examples out there of the latter (you'll often see more criticism than praise on govt spending). For example, [1].

[1] https://www.heritage.org/budget-and-spending/report/50-examp...

That waste exists elsewhere matters not. There is no good or bad waste, waste is a pejorative term on its own. Ones with the power to should attempt to stamp it out when able (i.e. when said stamping costs don't outweigh the benefits).