I hear this all the time from pro business people - usually large business owners waiting for tax payer hand outs, but not small business, ALL the while screaming about the free market blah blah blah.
If a large corp fouls up, WHY would it not be replaced by an existing small or even multiple small businesses that could do it better, hire more people then one large company (because some jobs would be duplicated) and generate more activity to the economy?
Provided that the services/goods the original corp had was of value in the first place.
This meme of "protect the Corp, because the world will come to end if you don't" seems to be nothing more than a self serving fear tactic that has no basis in reality. Especially, IF you truly believed in the free market instead of using it as a red herring to line your pockets.
Edit - for example a very common these especially in the software industry is that people who get fired/layed off will start their own company because they saw things that they didn't like or feel they could do better than the original. Thus you have multiple versions of Linux etc etc.
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