Your characterization of SPIAs is a little one-sided. It's longevity insurance, and we're just as likely to "waste" our money on that type of insurance as we are on health insurance, fire insurance, and liability insurance.
Social Security may be the only longevity insurance that most people need-- but not everyone is eligible for Social Security, and ERs can have a lot of zeros in their earnings records.
Most people could easily do better "elsewhere" by self-insuring their longevity, but if they did then all the financial advisors would be out of business. So would the annuity sales people.
The whole point of a SPIA is to keep people from running out of money in that tiny little black-swan corner of the bell curve that is not able to be treated as part of a log-normal distribution. If FIRECalc gives a 95% chance of success then an SPIA can cover most of the 5% chance of failure... and the rest of the failure probabilities can be handled by a variable spending plan. An SPIA can keep the "variable" part in the vicinity of "cheap groceries" without dipping into "cat food" territory.
