You are way of the beat here comparing schools and hospitals that are essential community services with subsidised television programs for the English market.
Making entertainment on the same priority of spending as schools and hospitals, services that do perform a real function.
Not so far off beat. It's a cultural service, one dedicated to preserving the art and cultural diversity of the British nations and of the UK as a whole. This is really important, and part of what gives the British such a strong international image. No where else in the English speaking world is there such a service, respected for its news and drama, independent, and generally speaking fairly transparent and responsible.
There is crap on the air, and the Beeb do make commissioning mistakes, but the fact that it's willing to take risks on these is a good sign. Look at British drama outside of the BBC right now. It will probably take decades for ITV to compete in quality original content again after melting down in a fit of reality and game show programming. C4 is laying almost as low. In this economy only the BBC can continue to commission projects based on their perceived cultural value. Even the Beeb's most quotidian programming (like Eastenders) can afford to be less cynical than those created under profit-minded executives.
http://www.guardian.co.uk/media/2009/jul/16/tv-writers-support-bbc-drama
God knows there are problems, but the BBC is really special, Brits. You don't know what you have over here.
EDIT: and the license fee is what makes it possible.