You're spot on. The original use of the term libertarian actually referred to socialist anarchists who were not only against the unjust power of the state but also against other forms of authoritarian power structures like the capitalist economy and social stratification by gender, race etc. Nowadays they have to go by left-libertarian or libertarian socialist (or just plain anarchist).
I don't know how "Libertarian" came to mean what it does now but it is a very incoherent ideology for exactly the reasons you point out and it probably continues to exist due to powerful interests in the "ruse" you mention too.
I don't know how "Libertarian" came to mean what it does now but it is a very incoherent ideology for exactly the reasons you point out and it probably continues to exist due to powerful interests in the "ruse" you mention too.