First of all you confused democratic socialism with social democracy. Socialism is fundamentally incompatible with capitalism. What you describe is social democracy.

More importantly, “properly regulated capitalism” has always led to regular capitalism. “properly regulated capitalism” still results in exploitation, if not domestically then abroad. “properly regulated capitalism” still results in commodification of common goods, depletion of resources, a class society, and environmental damage.

Capitalism has only ever worked in theory