The best argument against democracy is a five minute conversation with the average voter, as said by someone but who probably wasn't Winston Churchill. Dunno why it'd be any different within a workplace versus politics. (Of course there's also the idea that democracy is the worst except for all the others, which... I suppose. It's certainly better than what the fascists and the tankies come up with although that's not saying much.)
Also, this has certainly been tried although admittedly not in a holistic manner. The Nordic model is basically this blended with more traditional ownership structures. A mixture of the welfare state providing major services with privately owned enterprises alongside co-ops and "democratised workplaces." And... it's fine. Has some nice qualities when compared with contemporary socio-economic structures but the political process can muddy the waters and make things inefficient through perverse incentives. Not that similar perverse incentives don't exist elsewhere, but y'know...
It's like you said, the best option out of a bunch of flawed ones. We've not found the "perfect" governing system yet, but here in the Netherlands things are quite good. We're slow to change, but when we do it often has quite good, long lasting impacts.
In my personal opinion our system is better than most.
I really don't know what that would actually accomplish. How would any government benefit from doing that kind of a move, especially when the reason seems to just be that Elon is a douche, and that doesn't seem like a valid reason to do such things. Hell, even if we were to count this kind of blatant aiding of an enemy country as treason, I doubt this would be an appropriate response.
If anything, it might just set a dangerous precedent and in general be against the very same liberal values which are exactly why we're helping Ukraine against the foreign imperial occupier. Arbitrary nationalisation of the assets of politically inconvenient people is the kind of stuff that an autocratic regime such as the Russian Federation under Vova would do. And that's the kind of thing it actually does do, defenestration of political rivals is a convenient way to accomplish many goals, after all.
Doesn't the United States already have military communication satellites? If they wanted to give network connectivity to Ukranian drones, I'm pretty sure they could have done so as well.