I agree that self-sustaining colonies are a long, long way away, whether on the Moon or Mars, and that there are many other things you need to figure out before attempting it.
The thing with the Moon, though, is that it at least offers a potential path to commercially bootstrap your way to a real lunar infrastructure. The moon is cheap enough to get to that we already have companies planning to send landers there. The lunar X-Prize already has two companies who have purchased payload space on rockets for their landers.
The logistics of getting people to the Moon and back are again orders of magnitude better than getting them to/from Mars. We did it in the 1960’s and 1970’s, and we can do it again. Transit times of a few days instead of a few months are a huge deal.
If landing on the moon can be done cheaply, there is even the possibility of commercial exploitation in the form of expeditions and movie/TV rights. James Cameron would happily spend a half a billion dollars of other people’s money to film a moon mission, and that’s in the ballpark of funding for huge motion pictures.
Water in the lunar regolith would certainly be hard to extract, but the water at the poles is likely in the form of huge sheets of ice just sitting in permanently-dark craters. The lack of an atmosphere makes it possible to use small jump rockets or mass drivers to move the water to where people need it. Or just locate the base where the water is. We’re not talking about a small amount of water - Chandrayaan-1 found 600 million tonnes of it in 40 permanently-shadowed craters, and there’s no doubt much more yet to be discovered.
As for the lava tubes - some of them look like they have horizontal openings at the mouth of collapsed sections of lava tubes, meaning we might be able to just walk right into them. At first we wouldn’t pressurize the tubes, but something like a Bigelow inflatable habitat would be given instant protection from cosmic and solar radiation, temperature fluctuations and micrometeorites if placed inside one. Rather than building habitats in situ or covering inflatable habs with tonnes of regolith, we might be able to just drive one or more of those into the mouth of a tube and set it up inside.
The lunar dust is a real problem, as is the apparent lack of nitrogen for any long-term habitation. However, it’s possible that we might find pockets of nitrogen from cometary impacts or in cavities filled from outgassing. Nitrogen exploration might be one of those things that captures the imagination and leads to speculation and a ‘gold rush’ of sorts.
But once you get to the point where you can pressurize a lava tube, all the surface problems go away. Dust can be managed, radiation and meteorite risk goes away, etc.
Sure, this is all speculative, there are many hurdles in the way, and it’s high risk. It may be that the reward isn’t great enough to do it in the near future. But compared to the feasibility of actually building a self-sustaining colony on Mars, I’d take it any day.
Also, colonizing the Moon would require the interim development of hardware that strikes me as being much more useful than an ‘interplanetary supply chain’. We would be perfecting techniques for working in vacuum, small transfer ships between Earth and the Moon which could also be used for asteroid mining or transfers in Earth orbit, methods for mining, smelting, and transporting materials from bodies in a vacuum, low-gravity and zero-gravity manufacturing and living, and so on. These strike me as ‘core’ capabilities required for serious spacefaring, whereas much of the technology needed for Mars will be specific to that environment. And, because we would be iterating faster, development will be faster.
My idea for exploiting the moon would start with prizes for the first company to build a lander that can safely descend into a lava tube and send back images, another prize for a rover that can completely map one out, etc. Those would make for compelling pay-per-view or sponsored TV events. If we can cut the cost of space access by a factor of 10, that’s a reasonably self-funding idea. If Bezos’ New Glenn or New Armstrong can send serious payloads to the moon, manned missions become feasible for much less than the billions of dollars a Mars mission would cost.
And if it all goes sideways, like a biosphere collapse for a small station, you can shut it down and get the people off quickly. If something goes wrong on Mars, you’ll have a lot of dead colonists.