Government funding is limited in it's flexibility. It stays at set levels for long periods of time, and if it is changed, the changes are infrequent, poorly guided and unpredictable. In a capitalist market, schools are continually evaluated and rewarded for good performance by students and parents.
Eliminating government funding for schools allows for lower tax rates, leaving with citizens more money they can use for education.
Government funding encourages and even forces many citizens to settle for inferior education.