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> Productive and innovative businesses with really solid fundamentals (balance sheets) that were acquired and dismantled by PE.

You have way too much (unneeded) limiting qualifications. In Netherlands PE have bought loads of companies, then put the acquisition price as a loan on the balance sheet. Plus then sold the assets, made the company then lease those assets. Then those companies often went bankrupt as the leasing prices increased crazily.

> I would argue that moribund businesses who maintain a competitive moat but are otherwise extremely unproductive and inefficient are the real blight on society.

The companies I've cited weren't "extremely unproductive and inefficient". Businesses can be profitable and healthy without all the qualifications you think they need.

Do they do actual damage, or is this egghead economic theory?

Red Lobster?

Weren't they losing money for years on all-you-can-eat seafood specials [1]?

It's not uncommon in the fast food business to be breaking even or losing money on all aspects of the business while the true value of the company, its real estate portfolio, steadily grows. The fact that investors decided they wanted to cash out should be a surprise to no one.

[1] https://www.fastcompany.com/91129776/what-really-killed-red-...