Congress opted instead to fund it as a weapons-related program, but that doesn't mean that's all they're doing, and for a while they were explicitly spending the majority of their efforts on achieving energy gain. Recently they missed a deadline set by Congress which redirected the program to be only 20% for energy.
A really great history of the U.S. fusion program, from the 1950s to about 2012, is Search for the Ultimate Energy Source by Stephen O. Dean, who was deeply involved with much of it. http://www.amazon.com/Search-Ultimate-Energy-Source-ebook/dp...
Fusion has been severely limited by funding for a long time. Last year I read a history of the U.S. fusion program by Stephen O. Dean, one of the major figures involved. It was a sad, repeated story of scientific triumphs followed immediately by drastic budget cuts. In one case, we spent $372 million on a fusion reactor, completed it, then cancelled the program and dismantled it without running a single experiment.
Right now most of our money is going to ITER. Alternate approaches are starved. MIT's levitated dipole was cancelled, UW's FRC was reduced to computational studies, etc.
Even MIT's Alcator C-Mod, one of our leading tokamaks, keeps getting threatened with cancellation. It's got the strongest magnetic field and highest plasma pressure of any tokamak in the world, and a couple years ago made a pretty major breakthrough in tokamak physics (I-mode).
If fusion had more copious funding, then certainly a lot more physics grad students would take up the field. It's not like plasma physics is uniquely difficult.
http://www.amazon.com/Search-Ultimate-Energy-Source-Technolo...
http://en.wikipedia.org/wiki/Mirror_Fusion_Test_Facility