the problem is that not enough people make “good decisions”, partly because of how exhausting and time-consuming it is to carefully analyze and consider all the options for every facet of life. for example, there are lots of people who don’t want to switch to linux because they think its tedious to pick a distro, learn a new operating system, and find replacements/workarounds for software that doesn’t work out of the box on linux. now imagine having to do that for every single aspect of life. how do you pick your toothpaste and deodorant? do you carefully examine all the options each time you go to the store, or do you have a brand you pick without thinking about it because it works fine enough?
another problem with free markets is the inherent progression towards monopolies. this can be seen most readily with the so called natural monopolies (monopolies that emerge because of an extreme barrier to entry). how much choice do you have when it comes to your electricity provider? if they do something you don’t like, what can you do other than complain to a politician or move to a new region? aside from natural monopolies, we also see a progression towards monopolies because of inherent efficiencies of producing at scale.
there are other problems as well, such as corruption/lobbying, companies lying to the public, using psychology to manipulate people (link may not be the best source on the subject).