Listen, the home owner can own the pipe going to his house and a share of the pipes in his neighborhood. There is absolutely no need for the water company to own the pipes or the power company to own the power lines, or the phone company to own the data infrastructure. The developer can put them in and charge for maintenance and access. In fact, letting the supplier own them is very stupid because, as you've said, it's a conflict of interest of epic proportions, and all the regulation in the universe could never make up for it. Also your connection costs are way off base and do not reflect reality. If you believe running 100 feet of 3/8" HDPE costs $5,000, I've got a bridge to sell you.
Also looking at the cost of 12" vs 8" pipe is nutty, because most of your costs are labor to dig a trench and bury the pipe.