How were the coastal walls supposed to block the Kaiju?

You are probably right in all your points and one could easily classify the idea of this wall as stupid or a plot-inconsistency (neither do I remember any plausible reason to be given in the movie). Yet I'd say its stupidity served exactly the purpose it had to serve in the context of the movie.

It showed how desperate and, yes, stupid those bureaucrats were that cancelled the Jaeger program just because of some backlashes, only to build a wall that every reasonably-thinking human would classify as outright useless. But they were not thinking reasonably, they faced nothing less but humanity's end. It might on the very first thought make at least a small bit of sense (and is an intuitive human reaction) to build a wall as a last line of defense and this desperate and uninspired idea was the only thing they could come up with after the Jaeger program failed in their eyes. In light of a hopeless situation and mankind's guaranteed downfall, even the most stupid ideas may present at least a small bit of hope.

So yes, the idea of this wall as defense against the Kaiju is rather implausible, but on the other hand I think that's exactly how it was intended to appear, to emphasize the desperation and lack of further ideas of humanity in the presence of the Kaiju danger. And it may also have served to strengthen the audience's reliance on the Jaeger's to be successful, seeing that they are humanity's only reasonable hope left.

I would like to offer an alternative suggestion which gives the governments a little more tactical intelligence.

The film established that the kaiju were coming through more and more frequently. What started as every six months was rapidly becoming a matter of days - during the course of the film we saw the first double and triple events. In addition by this point the Jaegers were not winning every fight, lets assume that each side took roughly equal losses.

Striker Eureka was reputed to cost $100 billion dollars. If the rangers were losing a Jaeger every week and then every few days it's simply not possible to create Jaegers at the rate they're being lost!

We know the Kaiju originate from the pacific ocean, there's also significant evidence that they're much less adapted to life on land (just look at their underwater speeds against their ones on land).

By pulling the population back into the middle of the continents and drawing the Kaiju onto land. They would have a lot more time and opportunity to fire nuclear weapons at them (which was the pre-jaeger approach). This is a much more sustainable defence than spending hundreds of billions of dollars a day to defend the coastal cities.

The wall was being built for psychological reasons. So the tax payers were not happy about funding the Jaegers when they sometimes did damage to the coastal cities as well. Remember most people have never seen a Kaiju except for on tv. And so the government, who were running out of options, decided to increase job spaces by starting construction on a massive wall.

Now we can tell that this is a really crappy job and many people die in doing it. These people have built this wall and they know all the measures that have been taken to fortify it. So when they see a Kaiju rip through it like it was nothing. There spirits finally break and they realise that the Jaegers are the only option. Just like the government planned.

I think there is also a psychological extension to the response provided above by Napoleon Wilson in relation to the desperate decisions being made by the world governments at that time, ie the end of the world. There is a certain amount of reassurance that is provided by having something to put between you and the 'other', the outside world.

In this case, the idea of big bugger off massive wall is something that has been used successfully in history (the great wall of china http://en.wikipedia.org/wiki/Great_Wall_of_China and also hadrians wall in england http://en.wikipedia.org/wiki/Hadrians_Wall as 2 examples). They allow a definate defensive line to be drawn and are also a psychologically motivating device.

At a time when a lot of hope seemed to be loss, a big wall to keep things on the outside may have been seen as a good idea.

I know this question was posed years ago, but I just saw the movie and the decision to pull back the jaeger program and build a useless massive wall actually makes perfect sense AT THE TIME for the people in charge.

Let me give you a real life example of a decision that seemed to make perfect sense AT THE TIME makes absolutely no sense in hindsight.

I am a civil engineer. I sometimes design bridges and sometimes manage construction projects. A few years back, my company was hired by a town to design and rebuild a bridge across a river. I was not involved in this project, but due to lawsuits pertaining to this project my company is still dealing with the fallouts.

So, what happened? The local department of transportation wanted a bridge rebuilt as cheap as possible. Our people presented them with 2 options: (1) close down half the bridge, rebuild one side, and repeat with the other side, or (2) shut down the whole bridge and rebuild the whole thing all at once.

Option 1 would take twice as long and cost twice as much as option 2. Also, keep in mind that option 2 would shut down the crossing for 3 months and the next crossing to get to the other side was almost 6 miles away. Well, the people in charge decided to go with the cheaper option.

Lawsuits started coming in from the town, businesses, and residents in that area.

In hindsight, shutting down the bridge for months forcing people to take a 12 mile detour was a very bad idea. But at the time, the people in charge only had 1 thing in mind: to save money!

Some of the worst decisions in history made perfect sense to those people back then but makes no sense to us nowadays. Many of the decisions in WW2 by the leadership on both sides make no sense to us in hindsight. To me, the decision to pull back on the jaeger program and full speed on the wall of life is no exception. It is not a plot hole at all.

It was a Political Decision- didn't have to make sense.

Their Scientists probably argued that any creature bigger than Category 2 would cave in under its own weight.

In politics for every side there is an opposing side trying to find a new way looking for an out, and if that project appears plausible, cost a lot of money and employ a lot of people then it will even more likely make it even if it's otherwise a bad idea, .. but it still happens, because something has to get done, people expect change and things to get better and cannot predict exponential runaway growth.

Also when the wall project was started with class 1-2 Kaiju every couple of months, the wall as envisioned might have been good enough to stop them at least entering cities, and much cheaper over the life than constantly maintaining $1B jaegers, they didn't expect 2 and 3 at a time in 2-3x the size.

I'd also imagine that such a wall would have armament like cannons on par or higher than what could be carried by many yaeger which along with aerial megasize bombing is one of the biggest holes in the movie as far as I can tell to stop creatures...especially when striker eurka kills one with chest mounted missiles, gypsy kills 2+ with the plasma cannon, and others use close range blunt force or slashing attacks, cause if there were 1B spent on a high energy or other projectile weapon there wouldn't be much of a human centric plot. As the rift is single known, just build the weapon near that and anytime one pops out, pop it in the head, or nuke around the entrance to block off the entry point.

On that note, things aren't much better in the real world. We humans do lame expensive things all the time, like perpetually build mobile home trailer parks in the middle of tornado ally, super expensive not completely-earthquake in earthquake prone zones, and whole cities beneath sea level (e.g. New Orleans).