There are a lot of things that can be done in space. The problem is, we really don't know what's really useful to do up there. People came to America to hunt for gold, but that's not a big part of the modern economy. They came here to find spices and other goods from Asia but found a new continent instead.
Thus, the real goal of space exploration is not necessarily what is instantly apparent. It's what we have yet to figure out but will once we're there. I understand this well. On the other hand, we do need something to market exploration with. Because I fully support the idea of space exploration just because it's in our gene pool to explore.
Now, we have discovered a number of immediately and clearly obvious things to do up in space. All of them have to do with fairly small boxes of electronics bristling with thrusters and solar panels and antennas and maybe a few other things. Without satellites, GPS and weather forecasting and getting telephone and data connections to distant places is nearly impossible. Between this and simple automated science tasks, you have a sustained but not growing launch market.
However, consider the Iridium and GlobalStar networks, plus a number of competitors that never launched. All were trying to get worldwide cellphone service. The problem is that they never worked well enough to be anything more than a specialized item for people who could really afford it.
If you consider the power loss spent by a cell phone signal going through the atmosphere from low earth orbit vs. a cell phone signal that has to make it through trees and buildings between your phone and the cell phone station, you start to realize that your cellphone not need to be any more sensitive at receiving or powerful at broadcasting than a normal phone. With an array of focused antennas, you can provide a large number of reasonably small cells from orbit, thus giving sufficient capacity.
If you increase the sophistication of your orbiting cell tower, you start to realize that it's possible to make it easier to put up orbiting towers instead of trying to keep towers up in rural areas. Except that you have to get over the initial hump. You need to buy somewhere over sixty launches of an awfully heavy satellite and do it without going bankrupt. Iridium and GlobalStar showed just how hard that turns out to be with a smaller satellite that still requires special phones.
Or consider space manufacturing. Certain things like crystallization of proteins work better without gravity. Crystalline growth is easier without gravity and without atmosphere and the vacuum achievable in space is even better than we can make happen in the lab.
Thus, the biggest problem in what we can do in space is that everything is still too expensive and uncertain to make a solid investment case for, which is why investors on Wall Street do not fund space projects.
On the other hand, space travel with people and probes that return pictures to Earth capture the public's imagination. There are a few reasons why I put up with years of school. A future doing computing was one of them, but the space program was another. Thus, the effects of space exploration extend beyond simple and measurable things.
However, sending astronauts to space with the reward being immeasurable social values can only take up a limited budget before people start to find new ways to justify cutting funding. The best innovation created recently was realizing that your average person will pay a bunch of money to do something truly awesome, like travel in space. When you understand that space is just a long bet and that history is full of such long bets that have paid off well for humankind, it makes a little more sense.
On the other hand, I like to think of the National Geographic Society. They spend millions of dollars each year paying people to go exploring and write about it so that you can sit in your living room and read about it in a glossy magazine or watch it on TV. This is not a tiny sum of money, even if it's not enough to fund a space mission at present costs. What if they were able to fund missions solely on the basis of exclusive coverage?