The problem is: Where do you draw the line? How do you determine what should be left to us as individuals and what should be decided via the force of majority-rules democracy? Potentially everything could be left to the free market so there is no line to draw which wouldn't be to some extent, arbitrary. We could argue that the majority can decide what the limits of the government could be, but that would be government deciding its own limits. Not the best idea if you want a small government.
The US Constitution had some great lines drawn and it required much more than just majority rule whims to change it. Unfortunately, it's been butchered by politicians and the courts and that butchering has effectively become law through practice and precedent. The US Constitution had a good run, but it's fairly ineffective now.
If you're just asking a philosophical question about where to draw the line -- Libertarians have put a great deal of thought into this matter. The non-aggression principle (http://en.wikipedia.org/wiki/Non-aggression_principle) may not work in absolute terms, but it would be nice to move toward it to battle the continual feature creep of the federal government.
Societies, governments, and businesses have life cycles. America had a great start with the idea of Liberty being central to everything (except the ironic scourge of slavery). That notion of Liberty attracted people all over the world who helped turn the US into the super power that it was. Over time, though, the success and ends that Liberty created became more powerful than the core message of Liberty itself.
Now here we are. The Takers have infected our society to such a degree that all of our societal "safety nets" are headed for near-inevitable bankruptcy. Unless people wake up pretty soon and realize that we have to act responsibly, we're pretty much doomed to suffer a great amount of financial upheaval in the next 25 years. With the new season of Dancing With the Stars underway, though, I doubt anyone will have time to worry much about Liberty.
