I agree that going public hurts companies but not because the partners/founders can cash out. At least in the tech world once a company reaches a certain size, it seems as though founders can liquidate a large portion of their stock pre-IPO; Mark Zuckerberg doesn't need to worry about Facebook's IPO in order to get rich. Rather, I feel that having a somewhat-arbitrary, short-term indicator in the form of stock price is what hurts public companies and their culture much more than the loss of its leaders.
What you say is IMO correct. But, I think there is something more fundamental. A company cannot function to full potential when beholden to 2 masters - customer and investor - with opposing needs. The customer wants the best product/service possible; the investor wants the maximum ROI.
