Actually, given that it was wartime, seizing Tesla's papers was not an unreasonable act. There might have been something useful there, and if so, we certainly didn't want it to fall into enemy hands.
Indeed, my point exactly. Look at all the other stuff the U.S. did during the war that probably had a slim chance of paying off, but we did it anyway just because we didn't want to preclude anything that might remotely turn out succesful. The seizure occurred extrajudicially; the office that took custody of his papers did not have the statutory authority to do so in the case of U.S. citizens. Nevertheless the nominal purpose for the seizure was met: to identify any workable concepts in his work that could aid the war effort.
I find Tesla a fascinating person. He certainly had a lot of ability, but he also had a lot of deficiencies.
Indeed, a real-world assessment of Tesla seems to come to this conclusion time and again. But once someone accepts the notion of "Saint Tesla," there comes with that a speculative rebuttal to all the criticism.
As I understand it, he did not claim "free energy", ...
He himself did not, but that doesn't stop his disciples from asserting that he secretly knew about it and worked on it. Eccentric and charismatic people attract more conspiracy theories than ordinary people.
[Wireless transmission] would have been economically intractable, as it would have been next to impossible to make sure that the consumers of power paid the producers.
I gather most of Tesla's disciples don't really care about economic feasibility and would prefer an uncontrolled power distribution network. It's the same sort of argument that says network access should be free, food should be free, music and movies should be free, etc. When you examine those movements you often see a legitimate gripe in the form of some large corporate interest manipulating the variables in order to maximize profit at the expense of customer convenience and desire. That gives credibility to the opposite extreme in which little if any monetary interest intrudes.
So if you approach Tesla's power transmission theory from the assumption that current energy concerns are big corporations getting rich by nickel-and-diming consumers and charging money allegedly to maintain the wired power grid, you can see something attractive in the notion that the wired grid is merely an artificial constrain put in place to guarantee payment and establish a monopoly on a "public" electricity service. It's the electrical infrastructure equivalent of copy protection.
Tesla fans maintain that wireless transmission of electricity is possible and would be a lot cheaper than maintaining a wire transmission infrastructure, but is being suppressed because it would deprive Establishment energy producers of their monopoly and hegemony.
Besides, it's pretty clear that it didn't work the way he thought it did. Eventually, he simply ran out of people willing to invest in the scheme.
Tesla fans write that off as a smokescreen from mainstream science, the pawns of government and industry. Few have the qualifications to evaluate the claims directly. Choking Tesla's investment funds can be simply the means of suppression, e.g. by well-poisoning efforts aimed at the investors.
As long as one is committed to the Tesla religion and willing to suspend critical thought, a number of speculative excuses can apply to nearly every factual shortcoming.