Which means anyone whose wisdom matches their self-interest is going to understand that different things have very different efficiencies at different scales.
And some things happen to be dramatically more efficient/person and more effective, the larger the scale they can be coordinated at.
This exactly. All of these people who profess to believe in objectivism could easily move to a failed state and do anything they want to with zero government intervention. But they don't do that. They want all of the benefits of a working government with none of the things required to actually create a working government.
This position was already pointed out by Plato (in the Gorgias IIRC) as being inconsistent. Political systems are made up by people - if a society, in particular a democratic one, has certain systems in place, then this is probably because it was (at least believed to be) in the people's self interest.
One of her wonderful worldviews was to rejects altruism as a moral imperative, arguing that individuals should live for their own rational self-interest. Social security, based on the idea of supporting others, contradicts this principle.