"The private market has never invested in raw research, or in massive new projects."
Oh, PUH-LEEZE. Wilbur and Orville Wright. Thomas Edison. Leonardo DaVinci. Robert Goddard. See also Space Ship One, Paul Allen.
"NASA provides a vehicle to fund private research while shielding it from the legal risk of loss. How would you like to be the company footing the bill for the Columbia Disaster? Private can exploit technology and develop applications, but your overly idealistic if you think that it can tackle stuff like this."
If your argument is that lawyers suck, well, you're right. If your argument is that nobody innovates because lawyers suck, I refer you to the U.S. patent office. You're overly attached to NASA and government research money if you think private industry CAN'T tackle stuff like this.
About a hundred years ago, most research was done by private individuals who were financed by wealthy backers. Henry Bessemer was one. It is the way things should be. If we didn't have to pay about 40% of our income in taxes, there would be a lot more private investment.
At one time NASA was run and staffed by some very sharp people. Today it has become just another politically correct money pit.