We neither need nor should have a domestic intelligence apparatus. That's the point of moving it all to the Pentagon, where it'd be limited to defense purposes and have more actual oversight to keep it in line.
Including, presumably, those defense purposes served by a domestic intelligence apparatus, including the recruitment of citizens for espionage purposes by foreign powers. Assuming arguendo that we do not want our enemies stealing our secrets, the only alternative to spying on our own people would be to ask all foreign spies to please register at the door so that we can tell if the people nicking plans for fighter planes from Boeing or whoever are doing it for the Russians, making it a legitimate use of counter-espionage resources, or for Lockheed, in which case we presumably stick our fingers in our ears and let them get on with it. Then again, they may not be so obliging as to tell us, or to separate themselves neatly into categories.
Corporate counter-espionage should be on the shoulders of the individual corporation in question, and protecting IP and patents is a matter for civil courts. It should neither be the government's responsibility, mandate, nor authority to protect corporate assets.
If it's a military secret, then it should be the property of the military instead (not a corporation), and they already have the ability to protect it.
The other problem, of course, is that while the Pentagon might offer more oversight, it is at this point tantamount to oversight by a foreign country who we happen to pay to kill people on our behalf.
I'll grant you that there's too much corporate influence in the Pentagon, as there is in general, but singling them out as being alien and untrustworthy in some special context is really disingenous. The military is made up of ordinary people just like you and I who have families and homes, just like anyone else. It's a job. They're not an entity unto themselves.
I'd argue that they'd be inherently
more trustworthy than a private military contractor would be, because they're motivated partly by loyalty and oaths and honor, and not solely profit - youcan't outbid their contract or pay them to switch sides.