"practical-application-in-material production-or-directly-in-the-lives-of-people-useful" just means "there are people who are willing to spend money on this piece of technology". If nobody is willing to spend money on it, then it can't possibly be useful. If the research was useful then there would be a market for its output, and it would have no problem finding funding. That's the first point.
Second point: Are iPhones useful? Sure they are, but most people don't buy them solely for the utility, but because "OMG THIS IS REALLY COOL". If all they wanted was a device that did all the things that an iPhone does, they'd buy any number of equally useful but less expensive phone. The market for iPhones is so large partly because iPhones are marketed much better than competitors' phones. This is just the way things are, and I see no reason why science funding should be any different.
Third point: "Purists" (a.k.a. elitists) will say that science should be funded for the sake of learning about the universe. Well, pretty pictures of Mars teaches people about Mars, so surely that ought to be funded... What's so special about learning about the Higgs Boson compared with learning about the surface of Mars? They are both increasing our knowledge of the universe, and I think most people are much more concerned about the giant red blob they can see in the sky on some clear nights. That's the kind of universe that people want to learn about, and I find the "purist" argument nothing more than arrogant elitism. As if what the elite deems "worthy" of learning is some objective fact...