Well, I wouldn't mind buying the street that my house sits on just so that I can use it to block traffic and give everyone a hard time. People can always take another street, even if it adds an additional ten minutes onto their travel time. I mean, it's just like a board game! Annoying people is fun!!!
[/sarcasm]
I hate to take the point counter to the extreme free market position, but Everett has a point. If there's a highway and an owner buys it from the goverment and doesn't want anyone on it, he could keep the road all to himself. This would prevent many people from getting where they want, and cause an inconvinience in trying to find another route. However You could have public roads and have the private sector charge money to maintain them. Although I hate being moderate, I think this stance might work alright.
That seems to be the common practice already. In most local jursidictions major repair work is contracted to private firms. In some, usually smaller, jurisdictions minor maintainance is contracted out as well.
In my community the cost of outsourcing is compared to the cost of the work using municipal employees. Costs for overhead are figured in, so it's not just salaries. If the cost is lower for external work, and an appropriate bid come in, it goes to the private firm. There's not a good reason to use public dollars to pay a private firm more than it would cost to do it with paid staff.
For example, my city currently uses external private contractors for major road projects, reconstruction design engineering, traffic and use analysis, and for materials in smaller maintenance work. City staff performs road inspection and prioritization, minor patch repairs, and oversight of contractors from the bid preparation through final punch list.
The tasks do and should differ from city to city based on the cost effectiveness of tasks within the organization.