I mean California is getting close, but that's mostly because it hamstrung itself early on by allowing citizens to promote legislation.
While there are a few governments that I would like to be changed (Chinese Democracy anyone), the general trend towards democracy and liberty has been a good thing.
If saw a govt does get too big to fail, having it fail could well lead to chaos or a dictatorship.
I know there is a lot of whinging by Republicans in the US about 'small' government, but really you're not going to get decent change in your country overall unless the federal government acts as the states aren't up to it (seatbelt laws anyone?)