As one who's been in the public-service area for many years (police) I think it's a spectacularly bad idea for the reasons listed.
Such protective services are part of the "price of doing business" in a civilized society. Now, some areas have a sort of "subscription fee" for fire services, where homeowners contribute a small annual fee to be included in the fire protection district... I can see that to some degree.
However, we had a scandal locally where a municipal fire department responded to a non-subscribed residence and let it burn to the ground. The owner even offered to pay the fee on the spot.... No stamp, no firefighting.
The owner's complaint was that they had recently moved into the city and were unaware of the program....
Just the other day, emergency responders called to the scene of a potential suicide-by-drowning refused to go into the water after the individual. The reason? They had been prohibited from doing water rescues as a cost-cutting measure.