It did go over my head - sorry.
You're obviously right. The efficacy of hydrogen fuel cells will have to be measured against the efficacy of other fuel sources. Based on the idea that more energy is needed to produce the hydrogen, it seems highly unlikely that this will ever be a more viable fuel source than petroleum products.
Not necessarly. It depends entirely on the total costs of petrol-based alternatives vs. the total costs of H2.
Just like the flashlight battery, the laws of thremodynamics don't apply to economic choices. It's the costs that matter.
Again, I don't know if it will come to pass, but I think it's worth some money to research it. Fuel cell technology has arrived and is commercialized. Using hydrogen as a fuel for those cells is a logical next step in the research.