While being a compromise and having flaws (and name me one manned spaceflight vehicle that wasn't?) the Shuttle was far from needing to be put in a museum by 1986. The ONLY heavy lift flying body, with a damn good safety record for an experimental craft. Yes, it lost two orbiters in the entire time it was in service. That's the risks you take with rocketry. Stick with a limited, tiny capsule like Soyuz, and sure, you can keep them flying for a long time, but don't forget, they lost two crews with that vehicle early on, and have had a fail to orbit on one occasion as well.
As for Buran, the Russians shelved it as they were broke and in disarray. It had some advantages over the US Shuttle, but would have likely shown to have had failings as well.
NASA and the US have had two situations where they were nearly shut down: Apollo 1 and Apollo 13. Given the public nature of their funding, and the high profile they had from day 1, anything that led to a loss of life was highly troublesome for their funding. Then you get into the whole Proxmire style politicians, who saw NASA as a nice place to claw money from for their own pet projects, and a population that's not the most attentive or capable of anything long term, and you have an organization that cannot make those great leaps into the unknown in fear of being eliminated if something bad happens.
You want to look at a welfare program, well, look at any country's military program. There's more money going into keeping people employed for no real purpose other than keeping them employed than those organizations, but god help you if you try to cut there, you're labelled a traitor or worse.
Alvis 3.1