http://en.wikipedia.org/wiki/Mark_48_torpedo

I think the main advantage for rail guns are that they allow a much higher volume of fire and faster time to engage more targets. It just happens to use cheaper ammo - I'm sure the gun will be much more expensive to make than a standard machined barrel.

But a part of the point is that they could in theory.

they certainly would still spend whatever money it takes though: Mark 48 torpedos are a cool $1M to $3.5M.

This would be dandy for blowing up a submarine or major warship which costs a lot more. This might also be viable for "demonstrating" your capabilities one or several times. Sinking a major merchant marine fleet this way wouldn't be cost effective.

It just happens to use cheaper ammo - I'm sure the gun will be much more expensive to make than a standard machined barrel.

With a 200 mile stand-off range, a much more expensive gun would still make sense. The extreme range would make such a weapon more survivable. There would also be applications for land to shore fire support.

And what's the "rail gun" for nation building - how would serious money spent on R&D help us create a stable, democratic Afghanistan?

I fear we're stuck in the "meta" version of "if all you have is a hammer": in terms of budget, all we have, in international relations, is the Defense Department. It has its uses, but its effectiveness is increasingly limited, not by dollars, but by our vision.