The counter point I think is that if the persistence of a fading industry is in the public interest, then it is within the government's rights to give tax payer

The counter point I think is that if the persistence of a fading industry is in the public interest, then it is within the government's rights to give tax payer money to them. The only corollary I can immediately draw is the Detroit auto industry in 2008/2009 which was kept alive by bailouts despite the fact that it was not able to compete in the global market. I don't know if added competition by taxi companies is in the public interest, but it might be.