Hopes are high for enhancing public sector capabilities in addressing complex challenges and creating value from digitalization through various multi-actor and multi-level approaches. Yet, scholars also raise concerns that an emphasis on digital resource configurability may overlook important contexual dimensions, leading to increased managerialism and reduced legitimacy within new public sector paradigms. This paper explores the concept of public service ecosystems, both as an analytical lens and a subject of critique, focusing on the shifts brought about by digitalization, while scrutinizing the optimism and technological focus that often accompany these transformations. Drawing on a longitudinal case study from the Swedish public sector, we unveil how a public service ecosystem, facilitated by modular open-source architecture and multi-actor engagement, faces challenges including i) demand-supply gaps in digital services, ii) governance issues, and iii) integration between digital and physical channels. As such the framework of public service ecosystem is challenged as a sometimes naïve idea underplaying the complexity of e-service development in the public sector. At the same time it worked as a lens to structure and nuance the findings and bridge the gap between technological and contextual focus, and informed suggestions for further research.