Too Important To The System To Allow To Fail

Over and over we are hearing about companies that are “too big to fail.” The meaning is that if they fail they take everything else with it, so we must bail them out.
Suppose that something happened to the atmosphere and air had to be manufactured. Suppose that all of our lives depended on the ongoing manufacturing of air. Would any of us, even the hardest-core Republicans, even consider allowing this function to be in the hands of a private company? Of course we would not allow this.
Isn’t “too big to fail” the very definition of an important PUBLIC resource? If something is “too big to fail” because failure risks bringing down the entire economy, how did we ever allow such functions to fall into the hands of private companies in the first place?