The problem with limited government is the management of the commons. Everybody wants safe water, safe air, safe food, etc. Also you need to make investments in the future such as infrastructure, science research, education, etc. Once you have a huge economy with powerful competing interests you're going to need a big government to manage it all. The "small government" types say that we should let the free market somehow make the choices on all these things, but I think that is just naive thinking.