In my mind, the government is a heavy hammer, backed by lethal force. As such, it should be used sparingly to prevent concrete damages, enforce laws, and enforce property rights.
If a person or company is causing people real harm, that should be actionable by the government. If they are poisoning someone or killing their land, that is well within the remit.
Inversely, the government should not be a tool for optimizing society, or increasing the subjective efficiency or morality.
Government is a powerful tool, but that doesnt mean it the right tool for everything. Restraint and respecting other people's autononomy is a difficult skill to lean when you have the power to simply force compliance and "know" you are right.