Yeah nice false dilemma there. Just because some good comes of it at times does not mean we should just accept the status quo of rising taxes, rising inflation, and diminishing returns.
Only, we don't have rising taxes. Right now inflation is at or below what the Fed generally goes for. I don't even know what you mean with dimishing returns. And none of these is strongly related with military or intelligence R&D.
On the flip side we have:
1. bio warfare 2. nuclear weapons 3. autonomous robot weapons 4. electronic surveillance 5. speeding fines that have nothing to do with safety 6. e-waste
Now shut up and go reread the bill of rights.
Humans have misused almost every scientific and technological advance. They are short-sighted, greedy, and oppress their fellow humans. None of this is a surprise. However, things like the 'toy' that the OP complained about, and the list of negatives that you give, are not a reason to stop progess. The human race is better off, living healthier, more connected, safer lives, due to the creation of 'toys' paid for by taxes, even taking the negative effects into account.