Libertarians Against Privatization?

One thing about the argument over Kelo struck me as a little ironic in the wake of yesterday's decision: The libertarian side of the argument seems to entail that takings are permissible if the government is using the land itself to accomplish a goal, but not if it makes use of private markets to do so. In other words (on this argument) it is a public use if government condemns a strip of land to build a public highway, but not if it auctions the land to a private firm hoping to build a toll road, as many libertarians would presumably prefer. There does seem to be an interesting tension there (or, at any rate, a delicate balancing act) between the view that "public use" can't just mean any giveaway to a private company that would produce incedental public benefits, and the view that it's better for government to take advantage of the effiiciency of private markets rather than running things soup-to-nuts itself when possible. I see Eugene Volokh had the same thought, which he explores in a long and interesting post.