This is a valid criticism. There are several threads in science that are seemingly funded indefinitely despite modest to negligible progress and other threads that are utterly starved for funding.

Is there a bias at funding agencies that research in "carbon nanotubules" gets picked over "X research" year after year?

One long running research area that I'm reminded of is artificial photosynthesis. Let's make a combination PV cell and electrolytic cell, because optimizing both together is going to be totally easier than doing it separately. /s

From the perspective of a career minded professor sitting on a funding committee it's a good way to guarantee a growing set of citations. As long as people still research X the first papers in X will garner citations.

Oh like masers and lasers you mean ;-)