Money is better spent on anything, but something like low carbon energy would be a much better use of it.
Really, we should focus on getting any broadband to areas that don't have any. Rather than upgrading people with cable internet to gigabit.
1) The benefit is to businesses first, not necessarily consumers. Solid telepresence would allow specialists in various fields (medicine, engineering, etc.) to be located away from the big cities. It would also allow businesses to locate away from the big cities.
2) Part of the reason we don't have new applications is that so few people have gigabit (especially upload). Why write an application that requires gigabit when nobody will use it?
Every order of magnitude jump in communication upload speed spawned something new in technology usage that we couldn't see at the time.
300 baud -> email, BBS
9.6K baud -> graphical Internet
128K baud -> napster, MP3
1.0M baud -> video
So, what is waiting at 10M (we're just getting here in the rural areas and it's patchy), 100M, or 1G upload?
VR!
Stuff like telepresence doesn't require anywhere near gigabit.
I'm sure eventually there will be a need, but it's not today.