I make at least 30% less than any systems related industry job out there, so no I don't think my salary demands are outrageous. I think it's a combination of ageism, having a family - hence not being willing to put in insane hours, and the idea that someone coming from the public sector cannot succeed anywhere else.
Consider throwing your extra time into a side project. You'll come out ahead regardless. You'll get a nice chunk of passive income, you'll replace your day gig income and have a lot more flexibility, or you could turn it into a demo to show during interviews.