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True, a "good government", even if there is such a thing, is a social-utilitarian compromise.
The State is:
  • violent, but we hope there is net less violence among the citizens,
  • invasive, but we hope it better protects us from machinations of bad agents,
  • polluting, but we hope that it keeps the corporations' pollution in check,
  • wasteful, but we hope that the organization it brings creates large-scale efficiencies (structured commerce, cohesive public projects, eminent domain).
For me, the questions I ask myself are:
  • Is the idea of a central government essentially bad?
  • Or has simply every implementation so far been bad?
  • Is a "good" implementation possible, then? (Here "good" means, its existence is a net positive force in society. How to measure "net positive" is another story entirely.)
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Is the idea of a central government essentially bad?
My answer is "yes", because of the items you listed above and my belief that those are all false hopes. However, I'm not a utilitarian, so I would still be anti-state even if those hopes could be realized.
You raised a good question though, that I don't know the answer to, about whether the incentives are better for a centralized state or decentralized localities wrt pollution. Here's the tension I see:
  • A centralized state is easier and more valuable for industry to corrupt.
  • Decentralized localities can more easily shift pollution costs onto their neighbors.
I think there's better potential for localities to cooperate in a repeated game type of environment, but there could also be lots of value in being the one defector.
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The environment is inherently a global/singular/central problem, because there's only one planet. I think that's why it's natural that people seek centralised solution.
It remains to be seen if we can:
  • align incentives in government frameworks such that corruption by corporations is not possible,
  • develop a decentralised solution with a global and cohesive reach - this may, honestly, require a Bitcoin-level invention to be unveiled.
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