I agree with you on that. I hate the cost plus contract system that's in place (which is one of the many reasons I love the COTS/CCDev milestone contracts) and it is one of the biggest reasons projects have continually gone over budget and have been delayed. In a perfect world, I would love to see NASA (fit with a significantly larger budget) devote a significant amount of their budget towards high end R&D (different propulsion, engineering in zero-g or low gravity, asteroid mining technologies, etc.). Unfortunately, in the current political climate and with the SLS/Orion taking up a sizable chunk of NASA budget, it is neigh impossible to imagine a scenario in which Congress appropriates enough money to NASA to make effectively pursuing these technologies a reality.
I would strongly contend your second point about the "delusion" of private space exploration.