I think it needs to be remembered that we live in a different world now what we did back in BR days. As has already been said, attitudes to customer service have changed dramatically across the board. The same can be said for safety, comfort, speed, convienience, price etc. Take safety, the big safety improvement since privatisation was TPWS. TPWS was a government requirement due to a number of accidents caused by SPADs, and would have been fitted just the same by BR, infact BR was developing ATP at the time of privatisation. Arguably the only issue in that sence had privatisation not occured would have been that instead we might have had more limited ATP coverage (mainlines) rarther than widespread TPWS, the latter being safer due to the circumstances of most SPADs (most occur at low speeds where TPWS is totally effective, yet where ATP might not be fitted). Perhaps though we'd have gone the full way and had ATP on the mainlines and TPWS everywhere else. Another "safety" (plus "comfort", "quality" etc) think was the mass replacement of Mk1 stock with new trains. Again the TOCs did not choose to do this (any more than BR would have carried on eating away at the older SR slammers with more Networkers) but the government used legislation to force it on them, and could have done the same with BR.
Well, I agree there. I don't think the slammers would have lasted beyond 2000 under BR, with the corridor version of Networkers coming in to replace them, and possibly on overhead lines as well, displacing units such as 317s onto Regional Railways. I'd also expect a modified diesel version (Turbostar perhaps) to come in or RR to replace by cascade the last diesel units. As for TPWS, not only was there ATP, there was also SR-AWS that could have performed most of the features of TPWS a long time earlier.
This report, published in 1991 and currently on Railways Archive, pretty much sums it up. BR was flourishing, or could have been with a little more funding and ten more years. £1bn a year was 'the highest level of investment for thirty years', ridership was up and freight ton-miles were growing fast.
Still, that does bring freight up. That is the real success story of privatisation, loads more freight running much more efficiently. EWS/DBS, Freightliner, DRS, GBRf and so on have done a very good job.