I understand how cooperatives work, the point you continue to ignore is that none of what you say is seen working in practice despite over a century of people trying to compete with traditional business model under capitalism. Cooperative organization would work perfectly fine after the capitalist system is overthrown however.

Yes, communists distinguish between the state machine and the class who holds power. The problem communists have with the capitalist state is that it's built by the capital owning class in its own interests. Communists think that the working class has to build its own state machine that serves the interests of the workers.

Once again, if you actually study history, you will see that state style organization arises regardless of the political system, and societies that use this sort of organization outcompete those that don't. Communists aren't uptopians, we want tangible and practical improvements in the realm of the possible.