It doesn't matter why it exists; what matters is what effect it has. "The purpose of a system is what it does."

>But neither of us would have chosen to invent anything in the first place if it's all risk and no reward.

This is not true. Plenty of small companies invent things every day and never patent anything. The idea that companies would just stop innovating without patents is not just implausible, it's plainly untrue.

Not really, one often needs to prove how the innovation works even if algorithmic (for example a gene sequence identifying itself was justifiable for many companies, and proved they weren't making stuff up.)

Patents sound vague on purpose, but I assure you real money and mountains of expensive studies were done prior to publishing any claims. =3