I guess the way the military looks at it is- the MV-22 doesn't "directly" replace anything, the way a 9mm Berretta could replace a .45 calibre 1911. The tiltrotor brings new capabilities to the table that have been heretofore unavailable. Yes, it may take over the roles of some aircraft that are being phased-out anyway (CH-46), but that is not the intention nor it's primary mission which may still be publicly and intentionally undefined.
Yes, it is horribly expensive...and horribly complicated. Yes, it's flight envelope may hold as-yet undiscovered "surprises." Yes, arming it is going to be a problem. But ultimately it is an interestingly capable device that no other military force has. And that just has to be irresistably tantalizing for the guys who work in that big five-sided building in Washington D.C.
I am not a big fan of the V-22, but when I look at it in this way I have to soften my stance.