All big organisation have areas of waste but content is the BBC's raison d'être, not something that should be discarded to save money.
I'm an ex BBC Online employee. Most people don't realise quite how few people are involved in the creation and update of the BBC website. When I was there it was generally 2 people per site (and each person was on more than one site). We had a dozen staff looking after a hundred sites using old and borrowed tech and the occasional independent flash developer.
The BBC was never wasteful. Don't believe what you read in the anti-BBC press. They have their own agenda.
This puts the BBC as having a major interest in both optimal storage and transmission of streamed media. Why on earth is it not in the BBC's interest to investigate means of improving its service offering and lowering its cost base through use of improved video storage and transmission technology?
To get back to the original point as that's about maintenance of existing content, I agree 100% with those who are saying this is purely political. We have a strong strand in our commercial media which will push relentlessly for the BBC to be cut on all possible fronts because it's impinging on their ability to profit. I'm sorry, but that's rubbish. I watch more BBC than commercial content (and have done for many years) because it's better. You don't have to go very far back in history for the ITV franchise operators to have been lumbering behemoths viewed as a license to print money. The merged ITV that came out of Carlton and Granada was hardly a weak, minor player, nor is the RTL Group backed 5 family or the News Corporation backed Sky network. All are quite capable of building a serious, large-scale rival to the BBC, but they seem to dismiss it as too expensive compared to running repeats of imported clipshows.
What the BBC is doing here is absolutely wrong, but they're doing it in response to (government-favoured) self-serving political pressure from their commercial rivals and out of largely reasonable fear that if they aren't seen to do something like this themselves something worse will be forced on them. That is the core problem - excessive political attention being paid to low-quality competitors who think they have a right to the extra profit they'd have if the BBC didn't exist. They don't; I gladly pay a comparable amount for the BBC as for Sky's vastly lower quality subscription offering and the commercial media outlets need to realise this and raise their game.
Personally, as a British citizen and license-payer, I'm quite happy for the BBC to spend money on research and development (if well-thought and efficient; perhaps in this case it was misplaced), and I'm glad that the BBC is pushing technologies like video-over-internet compared to some of the more dinosaur-like traditional media companies.
Time to go watch some more BBC4 streaming over IP.