You have to remember that the NBN isn't just about home users; it will be available to the vast majority of business premises as well. Our company already uses 1GB network connections between our offices and our data centre. We are located in state capitals so we can get that bandwidth at reasonable prices, but if we had an office in a smaller town we would be out of luck. Having 1GB/s available means that smaller businesses will have access to lots of new services; hosted/cloud servers, off-site backup, HD video conferencing...
As other posters have said, most home users don't even need 100 Mb/s but there may be some who do and there will certainly be some businesses that do. The major cost component of the NBN is physically installing the fibre. Installing copper would cost about the same. Arguing against the cost of the NBN based on the speeds it supports being unnecessary is like arguing against the cost of building a suburban street because someone says it can support a 65 ton tank at its maximum design capacity. Although the maximum capacity will never be needed, a lower capacity road would cost the same.
While I am not convinced that a government can manage a project of this size without cost blow outs, at least the Labour government has a vision to provide a universal level of infrastructure. The Liberal plan will leave us with the same patchy mix of over-serviced cities and under-serviced rural areas.
As for why focusing on wireless is a bad idea, refer to the very informative posts in this thread on the relationship between speed and the spectrum required. If we can't deliver better than 20Mb/s over a few kilometres using copper. how can we expect wireless to do better when it is a much more restricted medium.