The setup isn't trivial, but in the long run I think it is best for everyone.
The rocket equation says that if you want to do anything besides sitting in one place, it's super expensive. Moving mass around requires throwing huge amounts of mass away.
Throwing rockets' worth of water away seems wasteful, but if we have it then it isn't that expensive.
And NASA has what the team will work on specifically: https://www.nasa.gov/sites/default/files/atoms/files/exp-61-...
All things that are needed for future exploration/colonization.
And I'm not sure sunk cost fallacy applies, especially in the context of SpaceX / Dragon. Although it could definitely apply to SLS.
If you wanted to argue that extending the life beyond 2024 or whatever it is, then I would agree with you, sunk cost is irrelevant.
I tend to only apply the term to something incomplete with run-away costs to finish. Or if something changes (demand-side) that renders said product to become obsolete before completion. I'd argue neither applies to the space station. Political whimsy shouldn't be a factor.