Why would you say that? By that logic a charitable institution has no one with a stake in it's long-term success. It's only goal is preserving itself and capturing more resources from donors. There's nothing about governments which makes them inherently incapable of hiring motivated staff.
In my experience, government workers, be they school teachers, nurses, librarians, or community workers are often some of most highly motivated workers I have met.
> it's not clear if "welfare" can expand beyond that.
It is clear if you believe that such funding is available from philanthropic sources. It's just a question of who we wish to give control of those resources to.
Of course it has: pissed-off voters. Mismanaged government-funded institutions such as DMVs or social security systems are a regular troublemaker for politicians.
Perhaps the constant demonizing of public services by private interests, (who btw often rely on government contracts to function), and certain politicians bought by these interests could be a contributing factor in why not?
But let me hear about how private healthcare and broadband is killing it please.
(I have Comcast, so it's not like I've even got the "best", but I'd way rather deal with Comcast or Blue Cross than any government agency...)
Let me put it this way: Comcast is the only reason why a lot of the US doesn't have gigabit internet at cheap prices.
It's a vicious circle, but not an inevitable one. There are plenty of examples of well-functioning government departments, and in some countries there is no significant difference between the performance of publicly run institutions and their private counterparts (although there is of course plenty of variance within both of those groups).
Funding for basic educational standards and a minimal social safety net is already a huge spending commitment for even the most successful governments, and it's not clear if "welfare" can expand beyond that.