Yeah, there are two ways to look at rocket development: One is to assess the size of the market and then develop a rocket that fits within a niche in that market. The other is to try for a revolutionary step change in launch costs, confident in the belief that if launch costs drop dramatically the market will expand to the point where fleets of reusable rockets will find customers.
There are still a lot of technical, regulatory and financial hurdles in front of Starship. It is by no means a done deal. And iterative development that works great in the early goings when prototyping can be done quickly and cheaply may not work so well when each rocket you blow up has 32 engines on it, heat shields, and all the other stuff you need for an orbital rocket. That gets spendy.
Even if Starship works, the timeline could be long. They were supposed to have a lunar version of that rocket ready for 2024, but here we are halfway through 2022 and there hasn’t been an orbital launch attempt yet. If that goes wrong, it could easily be 2023 before we see another attempt. And after they get the orbital inaertion and return working they have to prove out the ability to land the rocket back on the pad with the ‘chopsticks’.
Once they achieve all that, they have to figure out orbital refueling because without it Starship is nearly useless. That requires multiple ships and a fast launch cadence. They will also have to prove out Starship’s ability to stay in space for days and then still be able to relight the engines for landing.
To get all this done will likely require dozens of launches. If even one or two of them fail, it will be another long setback. And we haven’t even started on building out the payload fairings, human living spaces, heating, cooling, and all the other systems the rocket will need.
If it all succeeds, the next issue will be finding customers for all those Starships coming off the assembly line. At the rate Musk wants to build them, he would soon have the capacity to fly 100 ton payloads almost every day. No one knows if the launch market will expand to accomodate that, even at an order of magnitude reduction in current launch costs. Starship could still bankrupt SpaceX even if it works perfectly.
My money is on Elon, but this isn’t a done deal. However, reusability is here to stay, and other providers are getting into the game. New rockets that aren’t at least partially reusable will have a hard time competing. Even Electron, which tried to replace reusability with low cost rockets is getting into the reusability game.