I can't really disagree with you there, unfortunately
The money is going on bus routes that would run, and run profitably, anyway. What I'm saying is that that is a waste of scarce resources.
I wouldn't want to see means testing. I don't think there was anything wrong with the old system of heavily reduced fares. 50p or even £1 a journey is more than operators will often get but should still be affordable for even the poorest pensioners (who have a guaranteed minimum income of £159/week).
That said, it already is "means tested" for disabled people, you only get it in certain conditions. The same could apply for OAPs, only getting one if you're eligible for guarantee pension credit (which is the benefit you get as a top up if your pensions don't give you £159/week income). The means assessment has already been done, all the LA need to do is see a benefit letter.