"Hyperloop may appear bonkers but Musk has a history of Getting Shit Done, and I'd be inclined to throw some R&D money in his direction, just in case."
Musk does not yet have a reputation for getting stuff done. He has a reputation for starting off a lot of stuff that might yet be really good, but it's still too early to tell if it's a commercial success. Both Tesla and SpaceX are losing a ton of cash at the moment (it's early days), and it's by no means clear yet that they can successfully turn a profit. Musk's Gigafactory for instance is extremely vulnerable to be rendered obsolete should someone else invent a battery more practicable than today's lithium-ions.
Hyperloop Passenger Throughput
Hyperloop is completely unrealistic. To be commercially successful public transportation needs high throughput. It doesn't matter how fast it is, if it can carry only a few hundred people an hour it's not going to pay for itself.
Last I heard Hyperloop would carry maybe 20 people per pod. With pods travelling individually (they can't have a set of them joined together like a train), you'd be leaving a gap of at least, say, 2 minutes between pods for safety, so that's 600 people an hour.
That's truly pitiful. A Shinkansen can carry about 1500 people, and there's one every 5 minutes between Tokyo and Osaka. That's 18,000 people an hour, 30 times more people. And they can run them more regularly than that if they have to.
Is Even that Rate Achievable?
To be honest I doubt that they could ever get Hyperloop working that regularly either. To launch it you have to get people into a pod (1 minute), strap them in (5 minutes), put the pod in an airlock (30 seconds?), pump down the airlock (5 minutes?). So that's a launch time per pod of about 12 minutes, meaning you'd need at least 6 launch stations to keep sending them once every 2 minutes. And then with the usual "hang on a mo I've got to kiss the girlfriend goodbye" type delays that schedule could be easily screwed.
If they had a bigger pod they'd simply increase the loading time (more people, more air, more room for screw ups).
And to make that schedule work at all you'd need airline style check in to make sure people are in the right place at the right time, or passengers would have to be queued up to ensure there's a ready supply of passengers to fill pods. Both are bad news for the passenger experience. What's the point of queuing for an hour in the hope of getting a pod, or checking in 1 hour beforehand for a 30 minute journey?
Trains don't have this problem. A train pulls into the station, the doors are open for 1 minute, and you're away. 1500 people have got on and are on their way. It doesn't matter that people haven't sat down yet or put their luggage away because trains don't accelerate at Hyperloop's unnecessarily high rate. If demand increases you simply run longer trains.
And getting back to that 2 minute gap; to be able to go from near Mach 1 to stationary in 2 minutes requires a deceleration of at least 0.25G, though probably more given the signalling block sizes, etc.
That's actually quite a lot; along the entire length of the tube a pod would have to be able to generate this much braking force for it to be deemed 'safe' to run a pod once every 2 minutes. Given that a pod has no wheels, or anything else like it, the only tractive force available is electromagnetic.
But the whole point of Hyperloop is that the pods in the cruise phase have very little drive (which makes it cheap), so it would also have very little braking power.
So where does that 0.25G braking come from? Does the tube also have to act as a braking surface for friction pads? Does that wear out? Can it be used again afterwards?
There's so many technical barriers to safe and regular operation I can't see it happening. Increasing the inter-pod time makes the throughput even worse. Installing the necessary braking system makes the tube much, much more expensive.
Just Build the Train
In comparison to Hyperloop, high speed rail between LA and SF works commercially. It's approx 350 miles, which is 1 hour 45 minutes in a standard bullet train without stops. In that time you'd also have WiFi, 4G, a snacks trolley, etc. so the "extra" travel time isn't a complete waste. It's a good proposition for passengers.
Putting any government money into the snake-oilesque hyperloop would be a waste and a travesty. The companies involved are putting forward the "hey isn't it cool" without doing the simple analyses that say whether it's commercially realistic.
I notice that Musk himself isn't actually devoting much of his own money to the project, in effect licensing out the concept to others to do all the hard work. If that isn't a worrying sign about its lack of commercial viability I don't know what is.