The libertarian argument against government breaking up monopolies is pretty simple, we believe that most monopolies were created by the government in the first place.
I'm curious, is there a particular sect of libertarianism that you identify with? I don't think I've heard any of the mainstream branches make the argument you did, and I would like to see how your line of thinking fits into the larger libertarian cannon.
As a former libertarian, you're speaking for one particular subset of libertarians, not all of them. There are some that believe that in a pure unregulated market, monopolies would simply not arise in most cases, yes. There are others who believe that they will naturally arise, but it's okay, because that just indicates that the market has reached peak efficiency. And there are yet others who believe that the important part about markets is their freedom (as defined by Smith originally, i.e. free competition), and lack of regulation can hamper that.
These seem like they can be summarized as regulatory capture
https://en.m.wikipedia.org/wiki/Regulatory_capture
I definitely agree this exists. However, totally free markets can be dominated by monopolies through different mechanisms. new technology is monopolistic in nature because it often starts from a single/few place(s). Incumbent corporations can amass orders of magnitude of wealth making it functionally impossible to compete. This has become less prolific in the last 2-3 decades, but has been painfully true at every other point in human history when physical resistance (violent or nonviolent) was the only way to affect change.
This, by the way, assumes no purposeful anti-competitive behavior. Current anti-trust law requires houses where I live to be serviced by mutiple ISPs, so me (and almost everyone I've ever met, residence or corporate) have a huge menu of choices from company A, or a 56Kbps line from company B. What a coincidence -.-
> I'm curious, is there a particular sect of libertarianism that you identify with?
Not particularly.
> I don't think I've heard any of the mainstream branches make the argument you did, and I would like to see how your line of thinking fits into the larger libertarian cannon.
I think most Libertarianism has become a refugee camp for people recognizing and fighting government corruption rather than a conscientious political philosophy on it's own.