The problem is that libertarians always try to make the distinction that they're not anarchists and that they're not like the current government, but they fail to do so in any sort of workable manner. Let's take your example of a standing army for defense.
1) It needs to be funded.
2) It needs to be commanded.
1 requires taxes, an organization to collect it, laws on what is taxed, lawmakers to write those laws, courts to enforce those laws, lawyers to argue court cases, law enforcement officers to enforce court decisions, and it's suddenly government all the way down. We're right back to where we were before.
In order for 2 not to be just a different name for a warlord, the commander in chief needs to be an elected civilian. That means elections, representative bodies, separation of powers, and, well, you get the drift. The founding fathers weren't stupid, and created a pretty good system. That same system is what we have today.
Furthermore, a standing army isn't to deal with local warlords, it is to deal with external threats. A police force is there to deal with local warlord-wannabes who think that the government shouldn't have a monopoly on the use of force, and who think that they are better at running the local community than the elected bodies.
There are two types of libertarians. Those who think that government should be tiny, with everyone being some glorious self-sufficient pioneer in the new world. Those are the ones who should be hanging out in Somalia and Sudan, but don't, because those places a shit holes of failed states. Then there are those who think that government should be smaller, specifically in the areas that tells them that they can't do what they want or to do what they don't want to. All other areas, specifically those that they benefit from, are exactly a-ok. Those are called free-riders, and have been identified as a problem since the dawn of time when it comes to the allocation of resources.
I've said it before, I'll say it again: today's brand of American libertarians are the European communists of old: they identify problems just fine, but are advocating completely unworkable solutions and are willing to shit all over everyone else to implement them.