Well, in subsidizing transportation's defense, it's very difficult to provide good, alternative public transportation (I'm assuming you're referring to public transit) only through the direct revenues of riders. Nevertheless public transit is a very important system to have.This is definitely true, and if my poor readers will forgive me for droning in lecture mode for a minute, I think it's valuable to discuss just why this is.
Certain kinds of public transportation, like subways, have very high fixed costs but marginal costs that are close to zero. In such circumstances, the efficient economic prescription is to charge near-zero fares. This unfortunately means a loss of market discipline, and it's complicated a little by the fact that using taxes to fund transportation has its own negative effects, but from the perspective of sheer economic efficiency, using tax dollars to set fares closer to marginal cost is overwhelmingly positive.
Moreover, as Daniel points out, it can be difficult or impossible to support public transit on fares from ridership alone. This does not mean that public transit is an economic loss. In fact, it's easy to explain how a transit system might be unable to support itself through fares even if it's a large benefit overall. Consider the New York City subway, which I've used every day for the last two months. The alternatives for commuting to work are slim: taxis are far too expensive, cycling is slow and miserable in bad weather, and the costs of owning and parking a car in Manhattan are prohibitive. All in all, I'd be willing to pay at least $10 for each leg of my daily commute, and there are many more like me. But if MTA jacked up its fares to $10, the vast base of other customers who are willing to pay $3 or $4 would dry up, even though they cost almost nothing to transport. It's completely conceivable that there is no single price where MTA could raise enough money to fund its operations, even though there would be an enormous surplus if it could charge each individual customer the true value of the service.
Now, as Megan McArdle points out in a different context, it's important to recognize when we're just rehashing generic arguments in favor of socialism. After all, there are a lot of superficially good arguments for socialism, but in most cases they're far outweighed in practice by its negatives. For transportation within cities, however, I think there's often a perfect storm of high fixed costs, near-zero marginal costs, and the practical need to set a single price (i.e. an inability to price discriminate) that compels public investment.
This all ties back to my earlier post about the subsidy fallacy, the commonplace argument that because we have such large subsidies for roads and other forms of traditional transportation, almost any change in spending should be welcome. This frequently degenerates into hand-wavy rhetoric that justifies new projects in the absence of any cost-benefit analysis whatsoever. As I hope this post illustrates, there are strong economic arguments available to justify public subsidies for transit, which makes it all the more important that we avoid the weak ones.