As has been stated several times now, NASA's budget is a very small portion of the yearly federal budget. If you want to look for wasteful spending overall, then NASA is the wrong place to look.
A lot of it does come down to 'cost per pound to low earth orbit'.
If we could reduce that number then it might be possible to cut the government out of the loop, at least in terms of financing. Why do this at all? Part is just to expand, to grow as a people and a nation. Also as a way to drive the economy. At one time it was agriculture, then it was cars, then it was airplanes. Now it's information technology.
A fully reusable system is only an advantage if it cheaper than a expendable one. At several hundred million dollars a launch the shuttle is more expense than using a "big dumb booster", it make no difference if the shuttle itself is reusable.
The cost over-runs on the Ares system are mostly due to the falling value of the american dollar, not any inheirent defects in Ares.
Space has potential. Not just to spend a hundred million dollars to sent a few thousand dollars worth of parts to the outer planets for pictures. We can get humanity off this world forever, Build the huge solar collectors, create colonies everywhere, invent thing we can't even conceive of now
Space, it an area where we can shine.