They're trying to invest in basic infrastructure. We don't have any obvious use for this stuff yet...but how could we, when we it doesn't really exist yet? I mean I'm not saying it's the best use of money in the world, but you've gotta be pretty dense to not understand why they're doing it. If nobody ever spent money on seemingly useless things, we wouldn't have electricity or tv or radio or ANY remotely modern technology, even back further than those.
I'm reminded of a story of Faraday...it is said he gave a very early demonstration of electricity in London -- essentially two coils of wire, one around a magnet and one around a compass, so when the magnet moved the compass needle did too. After the demo, one of the audience members approached and said "Well that's all very interesting, but what USE is it?" to which Faraday simply replied, "Of what use is a newborn baby?"
Also I think it's worth noticing that so far investments in communications technology have never really been wasted. Telegraphs to telephones to dial-up to broadband, every time we expand it we find something to fill that space. Humans LOVE communications tech. This is fairly new tech, and while I can't think of any good use for the average person to have that much bandwidth, I'm sure someone will figure something out. Why not crank it all the way up and just see what happens? Plenty of far worse things that the government blows money on -- like bombing eight year old Pakistani kids at $60k+ each.
Oh, and I know this isn't the point, but if you offered me 500amps of electricity for my home at $35/month, I'd take it in a heartbeat. Not sure what I'd do with it, but I'm damn sure I'd have a helluva lot of fun figuring that out! Wonder how much juice you'd need to keep a gattling railgun operating... :)