From a democratic/ideological perspective you might be right.
On the other hand, having a royal family it cute -- doesn't that count for something :)
I live in Denmark where we also pay the royal family some money, few privileges, etc..
My personal pocket philosophy is that the money we pay the royal family is the cost of a peaceful transformation to democracy.
A revolution like the French isn't free or without risks. Paying off the monarchy for generations to come is quite possibly cheaper.
A revolution would have incurred negative growth, and it's entirely possible that our economy would have been marginally smaller today, had we opted for a violent revolution.
Would be fun to see if anyone did that math? :)
In any case, if paying a bit of money and respect was the cost of a peaceful adoption of democracy it might have been worth it.
Just look to Syria, paying Assad an absurd amount of money to take a ceremonial role would probably have been a lot cheaper, and less risky.