There are really three very different forces at work behind the Nazi-led German state's almost self-defeating investment in so-called superweapons. (By which I mean the diversion of enormous resources into the pursuit of technologies such as V-2 rockets, jet-bombers, Tiger II tanks, and the like.)

The backdrop is well-known, of course: the Second World War was--to a degree unprecedented in history--a war of rapid technological innovation on all sides. The technological arms race was unrelenting: fighters that been front-line machines in 1939 (like the Hurricane Mark I or the Messerschmitt BF-109A) were hopelessly outclassed by 1943. The advance of tank technology was similarly dramatic; the difference between the PzKw I, with which the Germans invaded Poland, and the PzKw V (Panther) which appeared in 1943, is mind-blowing. Add to this advances in radar, U-boat technologies (culminating in the Schnorkel), sub-hunting technologies, and so on... pretty much every area. This technological arms-race was the new 'normal' by 1940, and all belligerent powers threw enormous resources into it.

But Germany was different, and here are three reasons why.

First is the long tradition of decentralized German handcraft- and small (local) manufacturing, stretching back long before the German unification of 1871. Industrialization came to German lands long before Germany was a unified state; in the 1850s, you had very different centers of industrialization spread among the 30-odd German principalities. Many 'local' manufacturers produced for 'local' consumers--a regionalism that persisted in Germany after 1870. Jump to 1940-45, German wartime production overall, was rather astonishingly de-centralized (compared the the USSR, USA and UK). The decentralization of wartime production could have ill effects: such as with competing lines of aircraft coming out of Messerschmitt or Focke-Wulf or Arado--which made pilot training, provision of replacement parts, and so on all the more complex. But this decentralization permeated down to the production of parts as well; some ME-109 wings were made in almost-Handwerk facilities of 10 or 20 workers. Oddly enough, though, this also HELPED Germany after 1943, in that the decentralization of production is small workshops made the German war economy FAR more resilient in the face of strategic bombing. (easier to find and bomb one big aircraft factory than 10 little ones.) Okay, so why is this important? Much of German R&D, like wartime production, was similarly de-centralized. There were many competing projects among the different manufacturers, and also among the non-manufacturing entities. Indeed, the German educational establishment was similarly dispersed, by the way (there is no single German "Oxford-Cambridge" or "Harvard-Princeton", but rather a whole range of universities.) So, short version: R&D was more decentralized, following the decentralization of production and the decentralization of research expertise and facilities.

Secondly, the chaos of the Nazi Regime. While the Nazi state was technically an absolute dictatorship, the dictator himself often couldn't be bothered to make decisions, leaving top Nazis (Goering, Himmler, Bormann, etc.) to literally struggle against one another, jockeying for power and influence. (And when Hitler did deign to interfere, he was totally counterproductive, such as insisting that German researchers working on jet-engine technology prioritize bombers over fighters--thereby potentially curtailing Germany's best defense against Allied bombers in the futile dream of 'retaliating' against England.) (The success of the ME-262 program came about in part because Hitler's direct orders were evaded or even ignored by the researchers on the ground. So much for a dictatorship.) In the absence of leadership or central authority, every top Nazi had his or her "pet" R&D project, and fought to supply it with resources. In fact, just having such a pet project--like Goering and his Bf-110s--was more important than the project's actual success, in terms of its usefulness in the savage infighting of Nazi politics. Add to this the fact of three different "states"--the original German military and bureaucratic structure, the Nazi superimposition on top of this (with Gauleiter, etc.), and then (after 1942 or so) the SS with its own "state" superimposed over (or under) both of those... and you had even more decentralization, with redundant duplication, competition for resources between very similar departments, etc. In a word: chaos.

So, those are two (very different) origins of Germany's decentralized production, both of which fed into decentralized, often wildly-haphazard R&D programs, which were sponsored by different bureaus (Wehrmacht, private industry, Nazi party functionaries, SS functionaries) and all competing against each other. In this atmosphere, Germany sponsored MANY different projects, even those with small chances of success or with little hope of having any effect on the outcome of the war. It's a wonder that any of them produced anything. (or rather, a testament to the ingenuity and industriousness of German scientists and engineers on the ground-level.)

Such competition and even chaos appears in the USA's R&D efforts too, of course (with pigeon-guided bombs, bat-borne incendiaries, etc.)... but less so, at least proportionally. The US war economy was so huge, that redundancy and waste was inescapable. But for Germany, though, the waste mattered. In Germany, the sheer number of wonder-weapons projects diverted a huge amount of resources from wartime production, and in that way, almost certainly hastened Germany's defeat. (Trying to re-tool to produce Pzkw Tiger IIs in late 1944 instead of just cranking out more PzKw V Panthers was a foolish waste of resources, for instance.)

But there's a third mechanism here, and it's my own argument. (at least, I've not come across it fleshed out in any good book yet, though it might be out there.)

Namely this: functionally (i.e. neither by design nor intent, but with the 'beneficial' side-effect), that, while the many competing "wonder-weapons" programs (Wunderwaffen) had no material impact on the course of the war (and even counterproductive), they were absolutely crucial as propaganda.

These supposedly-secret weapons programs were not very secret. Rumors of them spread throughout the officer corps... and from there, to the men. Goebels even continually hinted at such things in official propaganda. And so the idea that Wunderwaffen were just around the corner--that any minute now, Hitler would provide a war-winning fighter, an unbeatable tank, an unstoppable u-boat, a Red-destroying rocket-launcher, etc.--played a substantial role in convincing German officers and soldiers to keep fighting. If they just held on for just one more week, the New Wonder Weapon would appear to save the day.

You see this in diaries and writings in 1944, where officers and sometimes even regular soldiers, would write hopefully about the rumors of Wunderwaffen, and certainly into 1945. Indeed, I believe it even appears in Anonymous' diary A Woman in Berlin, in April of 1945. (but I might be misremembering, and don't have the book handy.)