I think our dispute comes down to a single question: Are high prices alone proof enough of a dysfunctional market? You seem to say that by definition excessive prices are a market failure that has to be fixed by the government. I disagree. I think the standard of proof has to be higher than that.

If governments effectively start to target profit margins for particular services it will result in massive misallocation of capital. The prices of basic services will go up and innovation will suffer, because one reason for innovating is to earn very high margins for a while until cheaper alternatives become available.