You might look at Richard Overy's The Bombing War: Europe 1939-1945, which draws many of the same conclusions.

From an economic standpoint, the bombing campaign was a waste; 10 percent of Britain's spending went directly to Bomber Command, and the campaign did not slash 10 percent off of Germany's GDP. This is especially true for the war before 1944, at which point Allied air forces were able to deploy fighters with the range and numbers to establish air superiority. Starting in 1944, the bombing war switched from indiscriminate night-time raids to daylight raids on strategic targets like rail junctions, ball bearing plants, and oil refineries.

From a larger standpoint, however, the air war is completely rational. After the Blitz and continued reverses in southern Europe, the British had to strike somewhere, somehow, in order to raise public morale, and the bombing campaign did satisfy this demand. (War, like politics, is an art of the possible.) The air war allowed Britain to continue engagement with the enemy using its strengths - industrial power and access to American capital - without endangering its manpower, which had to be conserved carefully.

As the war progressed and Germany became bogged down in the Soviet Union, the bombing campaign was a key part of the Allied war of attrition. Between 1940 and 1944, the Germans tripled the personnel operating their anti-air defenses, and three full air divisions were dedicated to air superiority missions. Every ounce of metal and every hour of labor dedicated to air defense was denied to the Germans in the East. Increasing the strategic imbalance on the Eastern Front was by far the most important and successful factor in Allied war planning - and while the bombing campaign was not cost-effective or frankly effective at all on its own merits, it was absolutely effective in the larger scheme of the war.

This is especially true if you include the resources (by some estimates, 50 percent more than the US spent on the Manhattan Project but definitely as expensive in proportion to the economies of the two nations) Germany sunk into the V-weapon program in the calculation. The V1 was cost-effective, but a single V2 was half the cost of a bomber and producing alcohol fuel for a single launch required 30 tons of potatoes at a time of severe rationing. (Of course, many Allied bombing raids were aimed at V-weapon sites and you'd need more math than I can summon to figure out that balance sheet.) It's hard to believe the Germans would have sunk so many resources into this effort if they weren't trying to respond to the pressure of Allied bombing.

You can also argue that the bombing campaign was a necessary precursor to the February 1944 Big Week air offensive, which cost the Luftwaffe's air superiority wing half of its strength, including many irreplaceable veteran pilots. The RAF's combat experience, support crew training, and buildout of a bomber support infrastructure was key to the successful deployment of the USAAF's vast resources in the European theater. From that point on, the bombing campaign became increasingly effective and targeted raids crippled key parts of the German economy. [EDIT: This includes, vitally, rail and road junctions which the Germans were using to deploy troops in response to the D-Day landings.] Air superiority and the threat of long-range bombers crippled the German response to D-Day - and it's hard to put a price on that.

TL;DR: The RAF bombing campaign was very expensive and ineffective, but you can see why it made sense to begin and continue the air war. It also paved the way for the effective deployment of US air forces, and the 1944 air war victory in turn paved the way for a successful Allied landing in France.

REFERENCES:

As noted above, Richard Overy's The Bombing War: Europe 1939-1945

Defending Hitler's Reich: German Ground-Based Air Defenses, 1914-1945 by Edward B. Westermann

The RAF scandalously couldn't hit factories, especially during the bombings of the Ruhr valley in 1940. They were very inaccurate in their raids.

The early-war accuracy of Bomber Command was indeed woeful. It was ill-prepared for the campaign it found itself conducting: "The technical level of the force that went to war in 1939 - aircraft, bombs and equipment - can be described charitably as unsophisticated". It was thought that tight formations of bombers with gun turrets would be able to defend themselves over enemy territory; by the end of 1939 it was clear that this was not the case and the vast majority of subsequent Bomber Command missions were at night, but lacking navigational aids this meant they were seldom able to find their targets. The first major investigation into bombing accuracy, the Butt Report of 1941, famously concluded that only one in three bombers recorded as attacking their target actually got within five miles, and that was including attacks on French ports. Over more distant targets or in poor weather conditions the number dropped to one in ten or even fifteen.

The bombings of Germany were primarily done as retribution for the Blitz and made to appease the British population.

After the phony war, during which Bomber Command operated under restricted rules of engagement to the point that they were not permitted to attack warships in harbour, only at sea, attacks on military targets in Germany started in May 1940 in a bid to slow down the German campaign in France, to draw away fighters, and divert German bombers to attack British infrastructure (it failed in that regard). After the fall of France, the bomber was one of the few ways to strike directly at Germany - "The fighters are our salvation but the bombers alone provide the means of victory" (Churchill in September 1940).

There was certainly a desire for retribution amongst much of the British population - see e.g. ["Bomb back, and bomb hard": debating reprisals during the Blitz] (https://airminded.org/downloads/download-info/bomb-back-and-bomb-hard-debating-reprisals-during-the-blitz/), Brett Holman, Australian Journal of Politics and History 58, but to identify that as the primary motivation of Bomber Command would be wrong.

the RAF bombing campaign wasted vital resources which could have been used on the navy, fighters and army.

This is closely linked with the evaluation of the effectiveness of bombing as a whole. There's no question that the RAF, and Bomber Command in particular, received a massive investment of resources (the previous Churchill quote was in a memorandum to the Cabinet justifying and prioritising the rapid expansion of Bomber Command). If it had minimal effect, then obviously the resources were wasted. If it actually seriously degraded the German war effort then it's a rather more difficult calculation. At the most optimistic some thought that bombing alone would be sufficient to defeat Germany, and obviously that didn't happen so the utterly single-minded focus of some (particularly Harris) was misplaced. Even the keenest supporters of strategic bombing would have difficulty justifying the refusal to divert even limited resources to other areas, the lack of Liberators for Very Long Range maritime patrol aircraft at the height of the Battle of the Atlantic being perhaps the prime example. As they say, though, hindsight is 20/20, it's a lot easier to spot wasted resources and missed opportunities after the fact.

The primary goal of the bombings was to terrify the German workers into less productivity by leaving them homeless and to terrify the Germans into surrendering.

Though goals and priorities shifted over the war, from 1942 Bomber Command was primarily engaged in area attacks - hitting cities as a whole to destroy industry, facilities and housing with inevitably high death tolls. The policy was intended to reduce productivity and undermine the morale of the German population, ideally to the point of sparking political collapse or even revolution; the Luftwaffe attacks during the Blitz inspired the change in tactics to use greater proportions of incendiary bombs, but the lack of a collapse in British morale during the Blitz was either ignored or explained by stronger national character, or insufficient weight of bombs employed. The USAAF began with a policy of precision attacks, but weather conditions over Europe meant that visual bombing was not possible much of the time such that their raids tended towards area attacks as well.

The 1942 bombing of Cologne was primarily a PR stunt

Bomber Command had achieved little in the early part of the war attracting criticism from both the public and other services; the proponents of strategic bombing believed it was primarily a question of resources, and with sufficient heavy bombers (the four-engined Lancaster and Halifax were just starting to come into service), and improved guidance and marking technology, the campaign would be successful. Operation Millennium, the first Thousand Bomber Raid, was in part a propaganda exercise; Bomber Command itself only had around 400 front-line aircraft at the time so had to use Operational Training Units to make up the number (Coastal Command aircraft would have been employed, but the Admiralty vetoed their release), it was not a sustainable policy. It was a demonstration of what could be achieved with more resources, and did cause significant damage ('the most successful concentrated enemy air attack to date', according to German records). Further raids on Essen and Bremen were less successful.

Arthur Harris purposely made sure that Lancester crews wouldn't know about poor crew survivability in the case of a crash.

Mathematician Freeman Dyson worked in Operational Analysis for Bomber Command. One of his colleagues determined that the bail-out rate was worst in Lancasters, and Dyson wrote that this information was suppressed and not acted upon. He was correct in that the information was not publicised to crews, but wrong that it was not acted upon, efforts were made to improve the escape facilities (Wakelam, Operational research in RAF Bomber Command, 1941-1945)

Strategic bombing didn't achieve much and didn't significantly harm German morale or their industry.

That's the proverbial $64,000 question: how effective was the bombing. It's fiercely debated. At a minimum it absorbed considerable manpower and military effort in Luftwaffe flak and fighter defences. Some like Overy suggest it did not have a major industrial impact outside e.g. the oil campaign ; Adam Tooze argues in his [review of Overy's The Bombing War] (https://adamtooze.com/app/uploads/2016/03/Tooze-Book-Review-Richard-Overy-The-Bombers-and-the-Bombed-WSJ-Feb-2014.pdf) that "German armament production didn't collapse, as the theorists of air power had once predicted. But from the moment at which British bombing of the industrial districts of the Ruhr began in 1943, armament production halted its monthly increase. It began growing again only in early 1944, after the RAF had frittered away the fall in bombing Berlin—a political, not an economic, target".

Dresden wasn't a military target.

Dresden was no less or more of a military target than other comparable German cities; the morality of the area bombing policy can (and very frequently has) been debated, the difference in Dresden was the weight of attack and conditions resulting in a firestorm and massive casualties.

Majority of the bombings done in 1945 were pointless. Given examples are: Dresden, Cologne, Essen and Potsdam.

It could be considered "punitive in nature and excessive in scale" (Overy) but the war was ongoing, Germany had not surrendered. Bombing disrupted communication and hampered troop movement, and some still suggested the possibility of German morale finally collapsing. A choice between continuing the area attacks or leaving Bomber Command idle while other branches of the armed forces sustained casualties was hardly clear-cut.

The only examples cited I could find for the article are in the recommended reading section as follows: J. Friedrich "The Fire: The Bombing of Germany, 1940-1945", Columbia Uni. Press, 2008; R. Overy "The Bombing War: Europe, 1939-1945", Penguin, 2014

Overy's The Bombing War is an excellent book, the conclusions can be debated (see Tooze above) but it is thoroughly researched and fully sourced. Friedrich's Der Brand (The Fire) is a different kettle of fish; it has some value in highlighting the experiences of German civilians that are sometimes glossed over (there are numerous English language works looking at the experience of the British during the Blitz, far fewer that consider German civilians), but it frequently uses language that implies equivalence between bombing and the Holocaust. von Benda-Beckmann's A German catastrophe? German historians and the Allied bombings, 1945-2010 extensively analyses the historiography of Allied bombing and Der Brand is a central work in the last chapter looking at the most recent debates in Germany. In von Benda-Beckmann's words: "[Friedrich's] book contained many errors, lacked historical context and made the highly problematic argument that the Allied bombings had to be seen as a form of genocidal warfare, directed at erasing the German people and their rich culture."

From the points raised, it sounds like valid criticisms have been mixed with considerably more problematic arguments.

Follow-up question:

If the British had spent less money on Bomber Command, what were some other priorities that might have been more effective? How do they square with the pressing matter of maintaining morale and public support that /u/Prufrock451 mentions?

It seems to me that it was to the Allies' long-term advantage to destroy German air power and air facilities as much as possible, because Germany would have difficulty replacing them.

The Allies had the British Commonwealth Air Training Plan at airfields all across Canada, where they could keep training more air crews without much danger of attack by the Axis. So not knowing when the war would end, they were ready to continue for as long as needed. Also they were building planes, ships etc.

Would it make a big difference to their choice of target, knowing that they would have more air crews coming?