Security seems like it needs to be solved at the governmental level with more effective prosecution. I don't imagine that stores would hold up well against physical theft without state protection. Can companies/smaller governments realistically either?

This sounds extremely authoritarian to me. Today, if the state wanted to shutdown the internet backbone, they can by the same means you're alluding to - physical raid at all backbone infrastructure of the internet. That's as much government authority as I am willing to accept.