And another thing... Bailout edition

Chris makes a good comment here that brings up the bank bailout, which I have a question about.

Who thought it would be a good idea to give money to banks?!?

A. If banks can't raise money or hang onto what they've got, it's not them who needs the money; they clearly don't know what to do with it and should be out of business soon to safeguard anyone more who might be suckered into their schemes or facade of competence and prosperity.

B. Giving capital to a business only helps if they have a reasonable need for expansion that offers firm prospects of greater commercial success, which would then more than repay the original investment. Furthermore, said investor should be able to absorb the risk in case things don't pan out.