Part of accountability is the possibility for failure and the associated consequences. PSUs have no fear of failure, since they're fundamentally parasitic, living as they are on the tax receipts of the beleaguered middle class. Private industry either increases efficiency to the point of profit, or goes under, simple as. Show me the incentive, and I'll show you the results!
Of course, if there is complete government capture by industry, then there is no more risk of failure, and you have privatized PSUs. But let's say this, from 1947-1991, India traded the British for the IAS. Hardly much of an improvement. The only way to reduce their power is to transfer it to the private sector, outside of areas where the utility of the activity is all externality (e.g. defense, scientific research). We have to move in this direction or risk returning to the License Raj era. Perhaps this will create more problems, but at least our children won't curse us for leaving them with our parents' problems.
Saw the same thing playing out in public transport in a few different countries, incidentally. London railways are a particularly hilarious example of what happens when you privatise without proper accountability.