Some of the issues:
"The industry rose to prominence under President George H.W. Bush — Brown and Root, a Halliburton subsidiary, received a $9 million contract to study supplementing military efforts after the Persian Gulf war. The Clinton administration sent more work to contractors, but it is under the current president, a strong believer in government privatization, that things started booming. Gary Jackson, the president of Blackwater, envisions a day when any country faced with peacekeeping duties will simply call him and place an order. "I would like to have the largest, most professional private army in the world," he told me.
This raises some obvious questions. Shouldn't war be a government function? Why rely on the private sector for our national defense, even if it is largely a supporting role?
...
For one, substituting contactors for soldiers offers the government a way to avoid unpopular military forays. According to Myles Frechette, who was President Bill Clinton's ambassador to Colombia, private companies performed jobs in Latin America that would have been politically unpalatable for the armed forces. After all, if the government were shipping home soldiers' corpses from the coca fields, the public outcry would be tremendous. However, more than 20 private contractors have been killed in Colombia alone since 1998, and their deaths have barely registered.
This points to the biggest problem with the outsourcing of war: there is far less accountability to the American public and to international law than if real troops were performing the tasks. In the 1990's, several employees of one company, DynCorp, were implicated in a sex-trafficking scandal in Bosnia involving girls as young as 12. Had these men been soldiers, they would have faced court-martial proceedings. As private workers, they were simply put on the next plane back to America.
Think about it: a private military firm might decide to pack its own bags for any number of reasons, leaving American soldiers and equipment vulnerable to enemy attack. If the military really can't fight wars without contractors, it must at least come up with ironclad policies on what to do if the private soldiers break local laws or leave American forces in the lurch.
What happened in Falluja was a tragedy, no matter what uniform the slain men wore. Private contractors are viewed by Iraqis as part of the occupation, yet they lack the military and political backing of our combat troops. So far, the Pentagon has failed to prove it can take responsibility for either the actions or the safety of its private-sector soldiers.
http://www.nytimes.com/2004/04/02/opinion/02YEOM.html
Not as distracting and ridiculous as debating whether, for instance, girl scouts can be considered mercenaries, but let's give it a try.