ExMud,
I was a staff officer with the programme from about 93 onwards in AWC and later Group and was privy to pretty much all the policy meetings at Main Building. In the sense that the effort was on getting the Air Superiority sorted first, I guess you could say that the money was going there. But that was the intention from way before that.
Expensive and threatened with cancellation? In a way, yes to both. But by the time anyone was even talking about looking elsewhere the politicos of the day had already made it very clear that overseas options would not be considered - they had been many, many years before and dismissed in favour of UK plc. So, in messages of varying subtly, we were told to get on with it and make it work. Remember that by the nineties, the programme had already been through its worst times, for example the Germans trying to pull out after reunification. For the Governements it was all about "work share" which was based on the size of each country's stated purchase - some suspected that the UK stuck with the number 232 for so long because of that, but I couldn't possibly comment. Those in the know never thought it would be cancelled by that stage.
F3 had to be replaced at some stage and that, partly, was what Typhoon was about. At the time, everyone thought we would still have Tornado GR and Harrier for years to come, again hence air-to-air first. So, to your point about an agile fighter. Manoeuvrability and energy agility are good for many reasons, but for the sake of this discussion I would say that, RoE depending, there are plenty of potential scenarios where one could end up close in and manoeuvre becomes essential. Also, energy agility is essential to optimise missile Pk/effective range and missile defence.
Your last point is your best. Yes, of course we bought it because of the fun factor. And why not?
Fortunately, it all came good. And continues to do so. And, by the way, I have also been one of the biggest critics of the way the programme was run. The whole empire was so so massive, so political and so multinational, it was hardly surprising that it had its difficulties.