They’re not scrapping all the technology that went into the X-33. The aerospike engines will be used in the SLI, and most of the basic research into composites and ceramics will also make it over.
Frankly, I thought the X-33 was a bad choice anyway. I much preferred the VTOL rocket (DC-X) that was in the competition. That thing was WAY cool, and the project was much farther along (they were actually flying the 1/2 scale Proof-of-concept vehicle successfully).
Anyway, this was a project ripe for killing. It was going seriously over budget and over time. Hell, the thing was supposed to be flying three years ago, but engineers on the project couldn’t figure out how to keep fuel in it (the tank design couldn’t withstand the forces of flight). It had numerous other problems, too.
Anyway, the resource that were being poured into that will now go to the SLI, and Bush increased funding for that by 64%. So hopefully we’ll see another cool vehicle within a couple of years.