The Hubble servicing mission is outside what the reviewing panel found to be acceptable risks for the current shuttle fleet.
Since we’re not going to use the shuttles to get to the moon, or Mars or beyond for that matter, it’s a moot point.
We’re talking about exploration, not colonization. Antarctica is also an inhospitable place and not a good candidate for colonization at this point, but that doesn’t make it a worthless place to explore. It has huge scientific value - ice core samples that go back millenia, glaciers that collect and concentrate meteorites, unique ecological systems, aurora, conditions suitable for extended high-altitude balloon flights, etc.
Pre-Challenger, the media was a lot friendlier to NASA than they are now. Nearly every shuttle launch pre-empted programming, and there were eye-popping photospreads from missions like Voyager that would fill most of newsweeklies like TIME.
Since Challenger, they more or less stopped covering the shuttle (and NASA in general) unless they do something really wrong. When Galileo was launched, the coverage focused on what would become of its plutonium fuel should it explode in the sky like Challenger did. Next to nothing about the incredible results of the probe at Jupiter years later. A far cry from the Voyager days. Much press was given the manufacturing error of the Hubble mirror, little to the fact that the corrections worked wonderfully and we have a decade of photos worthy of ten Voyagers.
Meanwhile NASA wished to upgrade. The shuttle was old, and needed replacing. The Hubble was only designed for a decade’s use, and new telescopes needed to be lauched. NASA got their telescopes, but the Shuttle remained, aging and crumbling. The Crew Return Vehicle for the ISS was to provide the technology direction for the next generation of shuttles, but one of Bush’s first NASA-related acts in office was to scrap American funding for that and for the future Centrifuge Module, ensuring that no useful long-term studies of humans in low gravity (essential for Mars exploration) would be done on that satellite. There’s your cognitive dissonance.
I think he got an earful from his buddies in Houston about that one, which might explain the Moon-Mars Initiative in the first place.
In any event, the Hubble is more or less over anyway, and NASA didn’t want to risk the crew of another Space Jalopy for the sake of doing anything to it. The shuttle had received a facelift in the 1990s, but it’s still a quarter-century-old vehicle. The government has been too chicken to spend any real money on upgrading it (why buy a new car when the ol’ Gremlin just needs an oil change and some new fenders?)
I thought I was going somewhere more concrete with this, but it’s 4:30 AM. Sorry for the regurgitation. 
Americans spend $6 billion/year on tanning booths. Americans spend more money on cosmetics/year than they do on health care. Apparently health care for everyone is not all that important. There is plenty of money. Americans just need to incorporate more common sense as to how it is allocated.
Alcohol and tobacco anyone?