An unfunded project that never gets built is objectively worse than a military-funded project.
[0] https://en.m.wikipedia.org/wiki/PGM-11_Redstone#Redstone_der...
But it was the direct predecessor to microwave communications. It was just portable military distance measuring equipment (like the model-99 dme w/ ~1cm @50km) that used a signal they found easy to piggyback voice and data on. And included that in the field units.
AND 2nd, after a dozen or so more hugely expensive projects (ranging from failure to moderate success to "achieves objectives"), it led to the Airforce NAVSTAR program, which you know as... GPS.
So the question becomes: What was the actual "objective" value provided by those expensive initial radar experiments, despite failing to achieve their direct objective?
And it's moot for both these cases because the technology was needed for direct military applications anyway.
What's the practical or ideological benefit of industry-industry R&D when the military is going to be the only customer, or at least the only paying customer for the first years/decades of use?
I agree with you in general, with it being better for governments not picking the winners of markets or deciding who gets research money.
But military is such a unique (yet universally needed) type of market, that practicality here means treating them as a large customer with unique product needs ( products unlikely to be revenue generating on the public market), even if you don't treat it as direct government allocation or a fixed/manipulated market.
The only way I can think of to avoid that entirely would be some libertarian version of an all private, defense-by-contract type military.
And then you'd have concerns about whether that could hold up to peer adversaries, and dozens of other wildcard concerns.
Space X does better work in part because it can make its own decisions and focus on long term goals.
We're talking about just one of many successses on this page.
E.g., my astronomy professor mentioned to me in a conversation that the original design for the Hubble was smaller due to expected budget, but that it got up-sized because it turned out that they could piggy-back off of other relevant military development, and iirc, that went beyond just the larger available size of the shuttle bay.