Cedars: I agree with the sentiments in your post.
I am not a Welsh speaker, although I can understand some and use it in very limited conversation. My daughter-in-law's first language is Welsh, and on rare occasions she has to stop and think and translate her thoughts into English because the Welsh word or concept does not exactly convey the meaning. The Welsh word 'hiraeth' for example has no direct translation but means 'the homesickness for Wales felt by those who are not there and miss the country and it's culture' - whether that's geographical or historical.
My father was a Welsh speaker, although he rarely used it and it was discouraged throughout his education. His father owned and ran the village shop ('Pandy Stores') during the '30s depression and after in a small mining village near Port Talbot - Pontrhydyfen. The family still have the old shop ledgers, including notes saying 'sorry we can't pay the two shillings off our bill this week but could we please have a quarter of a pound of tea and some butter'. Times were very different then. One of the families in the village was the Jenkins, whose most famous son Dickie became world-famous as Richard Burton.
I went to a grammar school in Pembs in the late 60s/early 70s. Welsh was not an option.
Now, there is an upsurge in the Welsh language, but the biggest increase (I understand) is in new learners who have chosen to settle in Wales from elsewhere. It is 'politically correct' to learn Welsh, and there is a strong and influential movement within Wales (nicknamed the 'Taffia'). BBC and S4c are examples.
I hate to think of the amount of money we waste in being bilingual. Every roadsign, all government documents (my driving licence, HMRC tax papers, council tax demands, etc.) must by law be bilingual. My own view is that there are no residents of Wales who do not understand English.
I hope that my grand-daughters will be brought up to be bi-lingual. That is their heritage and I do my part by reading them bedtime stories in Welsh as far as I can.
Sorry, this is turning out to be a far longer post than I intended but it's a complicated issue. It's not quite true to say that Welshness increases the farther west you go. I live in Pembrokeshire (as far west as you can go). Here, the south of the county is English but there is adefinite line (the 'Landsker' line) north of which you are in Welsh territory. And, of course, the Welsh spoken in North Wales (esp. Ynys Mon) is quite different from the Welsh spoken here.
There is a legal requirement here for Welsh to be taught in schools and there are 'Welsh medium' schools where every subject is taught in Welsh.
But I agree with the thrust of your post. It would be far more useful if the resources were used to teach languages of more use in the modern world. I for one am fed up with government money being wasted in sending me every document in Welsh and English.