When Economies Of Scale Meet Bureaucratic Bloat

I had an object lesson in economies of scale last night. I used about $2 in ingredients to make home made refried beans. I spent about an hour and turned those ingredients into what would have cost me $7 at the grocery store. This is a fairly poor rate of return on my time, but if it was scaled-up and automated, it could be a profitable business--as evident from the many brands vying for my attention on the grocery store shelves.

But there are things which ought to benefit from such economies of scale, but are not.

College Dorms:
Ask any student who has lived in a dorm and purchased a meal plan. They always report saving money by renting an apartment and cooking their own food. A dorm and cafeteria ought to be able to shelter and feed a student for less than the student could do on their own.

Public Schools:
They receive funding per student that is much higher than the average Catholic school and they are usually larger and yet they achieve consistently poorer results.

Electricity and other utilities:
We are getting rapidly to the point where it is less expensive to provide your own electricity and water than the local utilities can do. This will only get worse as people start to go off-grid. The cost of building and maintaining lines is shared by all the users, but when users start opting out, these costs are shared by fewer remaining customers. This gives further incentive to defectors and the system soon collapses.