If the money is there to waste, you have some evidence that no one has a better idea about how to deploy the resources.
There's the problem of what "better" should mean, but private investors aren't going to fund government for fun (or similar), so many of the alternative meanings of better can't really be expected to inform a discussion about private investment. Like maybe stupid VC spending is evidence that tech companies aren't getting taxed enough, but that is solved by raising taxes, not by hand-wringing over questionable products.