As a active supporter of commercial space efforts both within NASA and outside of NASA, as well as a someone who's paying job involves the unmanned Mars program, I will be the first to say that private spaceflight does not negate the importance of publicly supported exploration - they complement each other.
Government's job, in my opinion, is to do those things that private industry can't -- thinks that don't necessarily return an immediate profit (or shouldn't) but are nonetheless good or necessary for our society. For the space program, this means the 'Lewis and Clark' role, where the government funds a risky venture for the benefit of us all, leaving the infrastructure and knowledge for its citizens to follow.
Right now we're at a point where the government has demonstrated the abilities and technology required to get satellites and people to low Earth orbit. Most satellites, except those of actual use to other government agencies, have transitioned to private industry, which has worked hard to drive down prices and increase reliability. Now its time for the government to at least get out of the way, and hopefully help bootstrap (through COTS) the same transformation in manned flight. If there is no profit to be had, then we need to reconsider things, but apparently enough companies think that there is that we should let them have a chance.
Nonetheless, beyond Earth orbit is not there yet. There is not yet an obvious impetus for private individuals and companies to explore Mars or other planets, yet I think most of us (here at least) recognize that it is in the long-term interest of our society. Therefor this is the proper role of government, and something that should be supported -- especially since in the grand scheme of the US Federal Budget, NASA represents a few crumbs.
My hope is, though, that improvements in access to LEO encouraged by private development will truly complement the government programs, and allow the us to do more with the same amount of money.