First off, there isn't a zero-sum game between Angry Birds and curing cancer. It takes different resources and skills and there isn't an easy or immediate conversion between the two.
I don't like Zynga (not to lump Angry Birds in with Zyngarbage) and what they do, but it's not like one could, if given majority ownership of the company, walk into their office and say, "Okay, we're going to sequence oncogenes now". You can't really fault them for not curing cancer, because they aren't set up to do it.
All that said, I think there is truth in the argument that VC lends itself to frivolity. VCs are no longer investors, so much as detachable managers. The problem is that a non-expert can't evaluate cancer research. On the other hand, any moron can evaluate and run a "social" web app.
If you treat executive positions as political favors to be handed out to one's cronies, and you're running biotech companies, you'll destroy them, because one actually needs to know things to run biotech. On the other hand, with the hot "social" companies, no one will notice the change.
Just as reality TV survived the end of its hype cycle, because it was so much cheaper (no writers or professional actors) than scripted television, so it is with social media. Talent is the scarce resource, and the nice thing about the social world is that one doesn't need much of it. They're marketing experiments; they can back-fill with solid technology later on in the process.
The dark secret to this is that there are a lot of middle-aged MBA types who never learned to understand technology, and haven't actually worked in over a decade, but want something to manage. As investors in cancer research, they'd be passive philanthropists; as paratrooper managers they'd have no clue. On the other hand, social media they can take over and run because it doesn't take a rocket scientist to know what those companies are doing.