Also, compare the PR impact of "The pilots safely ejected from the enormous explosion" vs. "the pilots died screaming in the enormous explosion". One instance of the latter cost us about five years. Even just on a PR basis the money may be well spent.
And no, I don't think just accounting for the PR is a good idea, the human factor is very important. I'm just saying that the PR factor alone is adequate to justify it before you consider the human factors.
The greatest threat to private spaceflight is the government stomping on it, and the most likely way that will happen (/most likely excuse the government will use) is fatalities in the program, because our culture not only doesn't want to take risks like that, it doesn't want anyone to be able to choose to take risks like that, for better or worse. (I'm serious about the ambivalence in "for better or worse"; I can muster good arguments either way. It is not sarcasm or snark.)