Money should not be spent on buying expensive biofuels. Money should be spent on developing less expensive biofuels.
The legitimate justification for the military is having the ability/capability to tap multiple fuel sources in the time of war/shortage to allow for the flexibility for such uncertainties. It should never be a political issue or an idealogical issue, it should remain a practical issue.
The real problem identified with the $26 per gallon fuel is a systemic problem with the goberment in general (and as a practical matter, the comparable thought process of a renter versus an owner). For some unexplained reason (and no matter how many scandals, firings and shamings that occur) they just are not concerned with wasting taxpayer money.
In summary, Biofuels are a great concept and the capability of use should be built in and available for such a crisis, but the actual use should not be occurring now, in this economy, as we are 16 trillion in debt and deficit spending 1.3 trillion every year (ie a yearly "stimulus" spending) so we cannot afford to waste $26 per gallon in more "feel" good activities.