Sounds like then the truly moral position would be to cut out the government entirely. If the freeholder is ready to take on the grave responsibility of ensuring every single interaction, both large and small, are secure, then they should also be responsible for guaranteeing their own rights from all threats large and small, and not abdicate that in favor of a shadowy government.

Believe it or not, in the moment, you can use any sort of force required to defend yourself from violence. This is especially true in places that have castle doctrines and stand-your-ground laws. The government is there mostly to sort it out afterwards, and to discourage aggression by providing an alternative (due process) and punishing transgressors. The punishment of crime is what the government monopolizes, not self defence, since the alternative is generations-long blood feuds.

Why should the government be able to monopolize the punishment of crime, and not those who uphold their own rights?

Because if they don't maintain law and order they fail to meet the basic definition of government.

Why does there need to be a government at all?

To defend the liberty of its citizens =)

Isn't that what the right of bear arms is for?