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In engineering, there is a phrase "the last 10% is 90% of the work." Much government R&D (which is more "R" than "D") falls into that category. In order to commercialize it, someone has to come along and do that remaining 90%. The patents create an incentive for someone to do that.

If the new welding method is developed enough to patent, but possibly not enough to mass produce new welding equipment, then it will require an investment from someone to get it into use outside the laboratory. Being able to license them a patent provides a greater incentive to make that investment. It's possible for an idea to be simultaneously an improvement, cheap in the long run, and also require an up-front investment that might never be made back without a guarantee of monopoly.

I can't judge how frequently this occurs, but it seems reasonable.

Being able to license them a patent provides a greater incentive to make that investment.

In theory. But that's not the only way things can play out. It's just as likely that if such an innovation is offered freely to everyone, that everyone will feel compelled to adopt it, exactly because of the fear that their competitors will. And nobody wants to get left behind.

Given that it's basically impossible to know how a given scenario will play out ahead of time, I don't buy this whole "grant patents on government sponsored developments and then sell them" based on some hypothetical scenario that lacks any real justification.

>If an idea is good, monopoly is icing, but not required for its adoption.

I would amend this to say that if an idea is obviously very good, and has an obviously large market, then monopoly is icing. The inventions that you described fit this description, but 99% of inventions do not. It's more likely that your invention is either a small part that might contribute to a big improvement in a major industry, or a complete invention that could make a big difference in a market that doesn't exist yet. In either case, a company might not want to invest the resources to find out if your invention is useful just to have their competitors copy them once the proof-of-concept is available.

>Do US Gov patents require that manufacturing be in the US?

Not by statute that I'm aware of. But again, if you've invented some esoteric device that might have a $50M market one day, nothing makes government patent review boards happier than licensing that to a small business in Minneapolis who will hire a few dozen engineers and maybe even get the thing built in the US.

If an idea is good

What if an idea is merely a small incremental improvement with a clear but somewhat expensive path to market?

Then is it good?

Patent the innovations in bringing it to market, or keep them as a trade secret. Other players shouldn't be punished because someone is both inefficient and has the money to spend on acquiring a patent. Government patents look like an excellent way to transfer publicly developed technology to the corporations with the access and cash to purchase them (GE, Boeing, etc).

I guess I didn't explain my scenario well enough.

NASA has some idea. People that work in the market see the idea and think "Oh, gee, that would make our products better, but it would take $10 million to figure it out". With no patent they then think "too bad it isn't worth developing".

Maybe that's an overly constructed scenario, but tech transfer isn't just about getting people to use great ideas (a better welding technique is an example of a great idea), it's also about commercializing ideas that would not necessarily get commercialized in the absence of the patent.