You are correct Traffic, but the major difference is cost recovery, not cost/benefit.
The US and others are more concerned with providing the services where they are needed, and then working out how they can be provided at a reasonable cost.
- The US does as you describe but does not pass on it's bureaucratic costs to the VFR towers, or insist on using Government employed ATCs. Hence over 60% of the VFR Towers are staffed by retired FAA ATCs on much lower wages than they were getting from the Government.
- Canada has a not-for-profit Civil ATC organisation, so users know they are paying only what it costs to provide a service. Any windfall surplus is returned to industry.
- The UK has about 160 ANSPs, all providing services in a contracted system where market forces operate. (Gatwick even employs a German company to provide it's Tower and Approach - but I'm not sure that will survive Brexit!)
Australia, on the other hand, has a Government-mandated cost recovery system. Government agencies such as Airservices and CASA are required to charge their customers to recover costs. Airservices charges by the weight of an aircraft, as if that had anything to do with the cost of providing ATC, and CASA charges $190 per hour, which is way beyond what they pay anybody.
Whether the Minister will admit to it or not, (and it is all under the Government's control) this type of regime, in order to fulfill the Government mandate, has to organise itself around where the most money can be extracted. In Airservices case this is over the oceans, the upper flight levels and major terminal areas. With CASA it means dumping all responsibility for GA onto 'self-managing" entities such as RAus and the Glider Federation, while concentrating on AOCs and the big end of aviation. (Yes - I know about the Chicago Convention)
Either the US or UK model would work fine in Australia and indeed, about 20 years ago, the Coalition started down that road of divesting Airservices (that is itself) of aerodrome ATC and Fire Services. There were many vested interests that stopped the process, however then air traffic at our non-controlled airports had not increased to current (non-COVID) levels so there was breathing space.
The mid-air at Mangalore is what, in the safety business, is called a leading indicator, or if you like a warning. Do nothing and it will inevitably happen again.