Well, figle, the BBC has to sell a product too, essentially, even if its free. Do you really think that "My man boobs and me" demonstrates a primary concern other than an attempt to get views. It certainly cannot be considered 'public service', can it?
The BBC is a great organisation, which does a great deal of really good things. However, at the same time it does a lot which is not justifiable under 'public service', nor is viable on a commercial basis. I claim that, if not supported by the law, people would still pay for the BBC, because it does produce such good content- so why have it supported by the law?
"I'm sure you'll find lots of dumb Americans who will post about how the government has no business funding the media and how the BBC is an affront to free speech and how Ayn Rand was a goddess of intellect. Have a little faith in our hegemony here, c'mon, man."
Ok, if you don't want a 'dumb American' to post about it, I, an intelligent Brit will do so instead. The government should not force people to pay for the BBC if they wish to connect to other television networks. To do so is a basic infringement on liberty, and cannot be justified since it does not protect any human rights.
The BBC is also, despite what you claim, biased. Of course, not overtly, but undercover, subtly. It has no way of avoiding bias: there is an editor who decides which stories are newsworthy and which are not; there are script writers; there are particular journalists in particular areas. It is impossible to avoid any bias in any news source, however with something like the BBC, the bias is not considered as much because we know, a priori, that they are 'balanced'.
The only ways to deal with bias is to allow people to easily, naturally move from one news source to another. However, the BBC has a huge competitive advantage owing to the subsidy it essentially receives. That means that the costs to somebody of moving from the BBC to another source would be far higher than for somebody to move from the Times to the Guardian, for instance.
When Murdoch changed to supporting the Tories, it was in reaction to the polls, not to try to lead them. Rather than being biased, he was taking the mainstream opinion.
Somebody funding news needs a motive, and there are only a few conceivable. Profit, propagation of an opinion and being forced to are the three genuinely probable ones. If we consider forcing people against their will to be immoral, we must conclude that profit is the better motive. Of course, when the forcing is done by government, the government can all to easily have another motive, and that can be very ugly indeed.