You know i have attended several TEA party meetings and never heard this idea mentioned. Matter of fact you are the first person I have heard bring it up.it cracks me up.
Libertarians are largely self taught history. Which means what they know about this is largely from multiple viewings of John Wayne movies. They like to dream of whipping out a six shooter and think this is all that is needed.
They like to ignore the fact that when the "west" was run this way it generally resulted in armed gangs and rich men's hired guns doing what they wanted. Then again, some of them are rich men who most likely miss the days when you could settle a wage dispute by sending in thugs to kill men. Ever heard a conservative rail about Pinkertons, rather than a union? They'll yap your ear off about the long dead Jimmy Hoffa's ties to organized crime, but ignore the fact that more than one robber baron used the mob and pinkertons to kill off his union reps.