The other side of that coin might be that this risk free piblic funding should be used to for the type of blue sky research stuff that won't get funded by corporations, not stuff that corporations might fund anyway.

On the other hand, you don't want a review board to say: "That looks like it could be useful, so we are going to withdraw your funding."

Something could be branded, "has no commercial applications," simply by lack of imagination. We want to keep imagination alive in blue sky research :-)