That model isn't used anywhere that I know of. Only the government has the land needed to make it work. There are also few negative externalities associated with excess water/electricity/garbage use. It is wasteful and you'll pay a little more but having unneeded drivers clog the roads makes things worse for everyone.

I agree that our transit networks have not been run ideally, but what's the alternative? I put them in the same bucket as the military. It isn't as efficient or as effective as you want it to be but that doesn't mean there is anyone else you're better off assigning the responsibility to.