The F-35... Good news/Bad news?

The F-35.  Still as controversial as ever.

I've avoided mentioning the F-35 for a while.

I've been critical of it in the past, both on the basis of what I believe is a flawed concept and execution, as well as it's suitability for Canada.  I've tried to take a step back and reevaluate the F-35, but so far I'm far from convinced.

GOOD NEWS:

• So far, the F-35 program has been safe from budget cuts, and likely will be for the near future.
• Its price is dropping...  Well...  Sort of.
• Construction of the F-35 has started in Italy.
• The Netherlands have take custody of their first two Lightning IIs.
• Production has continued, without significant new problems popping up.

BAD NEWS:

• In order for the F-35 program to continue, the U.S. Military may need to make some serious cuts to personnel.  
• U.S. sequestration mandated "furloughs" will undoubtedly slow down F-35 flight testing and development.
• The software still has bugs and is proving to be a little bit of a challenge to fix.
• Those Dutch F-35s?  Straight to storage.
• The JSF program still has "significant" challenges, and production is unlikely to be sped up.  Funding has been cut until these problems are solved.
• The possibility of the Pentagon canceling the F-35 altogether is still very real.

So, basically, the F-35 is still as controversial as ever.

The crux of the F-35's woes at this time is concurrency.  Costs can't come down considerably until production increases, but it's hard to justify pumping out jets that will need to be retrofitted and fixed at a later date, adding to the cost.

So what happens now?  Will the focus shift to getting the F-35 up and ready in order to secure future orders?  Will production be cut, possibly causing the "death spiral"?  Will the JSF move on to the next step of becoming either an operational fighter or will it become a footnote in aviation history?