First off, corporations from a few hundred years ago were created by "acts" of the king. So, every corporation back then was a privilege of the state, and you can be sure the king was banking some coin off the production of the people who ran the corporation. This is true back in the days of Venetian trade, the Dutch East India Company, etc.
In the early days of America, corporations were very similar, since we got our basic legal system from Britain. Corporations have always been granted state privilege, and I would argue that some of that is good and some of that is very bad.
In Massachusetts, corporations were prohibited from owning real estate. For that reason, business people turned to trusts (common law trusts) to conduct business. Since trusts did not have state-approved limited liability, they obtained it through their contracts and through how they conducted the business of the trusts.
Rockefeller's Standard Oil was the Standard Oil TRUST, not corporation. When his empire got big, the government wanted to bust up his business (what they called a "monopoly") and this is where the term "trust busting" comes from, as they were busting up his business trusts.
Since that time, the states have relaxed prohibitions of corporations, so most people today use corporations rather than trusts for business. This issue of limited liability is VERY important in business. Nobody with any assets wants to risk everything they own on a business venture that might or might not pan out.
Most people don't know there were actually THREE people who founded Apple Computer, not two. But the third guy was the only one who had anything to lose financially, so he backed out and sold his interest for $800 way back when. He would probably be a billionaire today if he held on, but he didn't want to lose his house and everything he owned if things went bad.
Limited liability is necessary because investors WILL NOT invest if they stand to lose everything.
The problem comes in when you allow BIG BUSINESS (whether in corporate form, partnership form, trust form, or even sole proprietor form) to have SPECIAL PRIVILEGES and when you allow the executives to go free when they commit crimes, not just make bad business decisions.
It is the "old boys club" where the politically-connected get money from government, special rules passed to limit competition, and their companies pay fines for criminal activity that the executives did rather than them going to jail.
It is not corporations that are the problem. It is the privilege of BIG BUSINESS in bed with BIG GOVERNMENT that is the problem.
Always has been, going back to the European kings.
The politically-connected are the ones who are corrupt (or corrupted by the system), and they are the ones who are causing the problems. The rest of us need limited liability for investment purposes in order to have a prosperous economy.