I agree completely that this woman was too idealistic. While it's all well and good to defend the rights of an individual, a world where it's every man for himself would result in a collapse and reversal of everything we've built up over the years.Your argument is that rational egoism fails because man is ultimately evil. So somehow that puts you in favor big government? Forgive me for not following your logic here.
... I'm not saying what we have now is the perfect solution, but the way forward IS FORWARD, not backwards - and I meet too many philosophers (who mostly just uphold the views of other philosophers like this) who don't seem to understand this.
If man is ultimately evil, then that only supports the argument that collectively working preserving individual liberty is the only purpose government can serve without being corrosive to its own objective.
The alternative is that people are good, and government is only as efficient as it can operate on a premise of perfect knowledge.
Big government can only be intentionally harmful, or deleteriously inefficient. Take your pick. This does not even begin to address the issue of corruption.