Why were some economists critical of the performance of many public sector enterprises?

They were unprofitable and a drain on resources.

The correct answer is Option 3: They were unprofitable and a drain on resources.

Many economists criticized public sector enterprises for being unprofitable, which led to them being viewed as a drain on government resources. This inefficiency often stemmed from lack of competition, bureaucratic management, and insufficient accountability, leading to calls for reforms and privatization in some sectors.