I agree, we should dispose with the cops. Private security for those who have bootstrapped themselves into the means to pay for it, sure, but that's it.
If the 3rd party screws up and gets sued the taxpayer isn't footing the bill so they have incentive not to screw up. Every time the contract renews you have an opportunity to go with a totally new organization whereas even the best efforts at refreshing a government department wind up as a sort of ship of Theseus. A 3rd party also has a damn good incentive not to treat people badly because they are the customer and they have a contract renewal hanging over their head. A 3rd party also has no incentive to spend big bucks operating MRAPs and other military toys that are not relevant to the job at hand. It probably makes sense to retain investigative work under the government umbrella (avoids some conflicts of interests) but for routine patrol duties, security and traffic detail there is no advantage to having official government police instead of private security, at least from the perspective of the people being policed.
A lot of societies current gripes with policing would be mitigated under the incentive structure that having a 3rd party contractor gets you. I'm sure other problems would pop up but I don't think they would equal or surpass our current problems so it would be a net improvement.
Anyway I am sure I got some details wrong, it was fairly interesting news when it all went down.
Privatised security is an almost prototypical dystopian nightmare. Look no further than TSA. Millgram might have fudged his data, but the idea that giving someone a uniform and power over others tends to awry is still somewhat plausible.
Other examples: those rent-a-goons shooting civilians in Iraq for sport. (With, by the way, double the salary and many military toys not relevant to the job at hand). The US health system also comes to mind, only that you would have even less choice to chose your local police short of moving.
the "kids for cash" scandal was in Pennsylvania unless you were thinking of another case where that was going on.
There's also the movie "Holes", the book it was based on, and the reality it was based on. "Boot camps" are plagued with corruption, abuse, and neglect all over the US. Wherever you are, if you dig deeply enough, you are likely to find someone profiting from children's misery.
I've generally had better experiences with airports whose TSA screening is contracted out to third parties (eg. SFO) than those where it's done by the government agency itself (eg. JFK, Boston Logan).
Look at the US military procurement programs. By getting unaccountable soldiers out of the way, we have cost-efficient, effective contractors saving the taxpayer money every day.