(2) If it were, indeed, impossible for non-researchers to understand a particular field deep enough to appreciate it, then I would agree that an argument could be made that it should not be publically funded.
I think we are overly focussed on the very esoteric areas of QM and cosmology. If the above is a requirement for funding then there will not be much of anything funded.
I'd suggest that the average man-on-the-street can not understand much of what goes on in almost any field.
The wonders that are uncovered as we do more genome readings, the chemistry involved in understanding how they affect disease processes in our bodies, the complexity of ecological webs, the physics involved in the global warming debate, the real nature of a clone -- all these seem to be beyond a real appreciation by a very large number of the taxpayers funding it.
The research going on to produce better batteries, the trade offs in using them, the physics of new types of TV sets. The list that the average Joe can never understand includes all the leading edges of science and technology today.
I am not one who thinks that all that many people can, even with a lot of effort, ever understand much of this. Just like the Olympic athlete example we are all limited in different ways.