I agree that it's possible to preserve many of the benefits of competition under a more centralized and explicitly cooperative structure. You see this sometimes within large for-profit companies that have competing products, which are siloed from each other in the workplace. This works fine, because there is still a profit motive at work and the identical evolutionary forces that will kill a particular silo if it's underperforming, and the same competitive pressure to perform.
Much larger cooperative structures are less proven to work and are more hypothetical, though, even if CERN is an example of such a structure working. The risk, mainly, is that there isn't a good corrective mechanism if the whole thing becomes corrupted or rotten from the top. The other risk is that the cooperation is actually detrimental to progress because it correlates outcomes via group think. Some decorrelation is nice. I am happy that Musk et al. weren't forced to become cogs at NASA, and could explore their own ideas, which was easier to achieve by then being explicitly separate entities (even if they were reliant on contracts).
Much larger cooperative structures are less proven to work and are more hypothetical, though, even if CERN is an example of such a structure working. The risk, mainly, is that there isn't a good corrective mechanism if the whole thing becomes corrupted or rotten from the top. The other risk is that the cooperation is actually detrimental to progress because it correlates outcomes via group think. Some decorrelation is nice. I am happy that Musk et al. weren't forced to become cogs at NASA, and could explore their own ideas, which was easier to achieve by then being explicitly separate entities (even if they were reliant on contracts).