Sometimes you gotta throw your money at a lot of stuff to make something stick (and work). The government routinely does this, and does it even more during times of war. Music labels do this, as do sports agents, etc.
The truth is that there is no real guarantee that anything you throw your money at will work. If you're evaluating BFL as a business, as a VC, it's probably not going to look very good. But it could, so you take a chance.
The government does this because it's not their money and they can always steal more from people that work for a living. Doing business with a company that lies constantly about everything(BFL) is a bad idea and encourages more of the same.
If a VC was in there and would see Josh's behaviour on the forums, he'd be out. Very fast. Like within one minute.
VCs are really the last people you want to piss off.