We're also talking about a governmental body. Generating the highest returns possible is a non-goal, and disregarding potentially useful things simply because they aren't the best possible use of funds is an easy way to just never do anything.
I don't believe that you guys all believe the military industrial complex should start sitting on cash and collecting interest, even though that's what you're saying. The obvious solution is "they don't need that much money", but that's unrelated to how they spend the money they do have.