If the military is paying for it then it's already in stage 3. Just because something isn't readily available to the public doesn't mean it's a failure - I can't buy a rocket but the various space programs still do lots of cool things and they have money to pay for it.
Military pays for a lot of stuff that then is not going anywhere. Just as other venture funds do. You can't win without taking some risks. But that doesn't mean everything the army pays for automatically is a great thing.
