If a private firm failed to keep passengers safe, the motive for doing so would be perceived as capitalist greed. The CEO of such a firm would be paid extremel

If a private firm failed to keep passengers safe, the motive for doing so would be perceived as capitalist greed. The CEO of such a firm would be paid extremely well, and failures at the airport would be viewed as the result of cost cutting measures, poor working conditions for employees, cronyism, etc. The privacy issue is interesting, but I don't think it has much to do with the initial creation of the TSA. The main goal at the time the TSA was created was to create the appearance that leaders had things under control and to prevent disruptions caused by knee-jerk reactions (spiking market prices, etc.). In reality these would not likely have lasted long w/o government intervention, but they are the kinds of things that planners fear most.