"If we really wanted CATS, all we have to do is remove the restrictions on the Russian launch companies. Right now, the Soyuz booster can put about 16,000 pounds into LEO for about $16 million. That's works out to the $1000/pound level that NASA hopes to reach one day. The Proton may actually be even cheaper per pound."

I believe that at least the quota restriction has been removed (starting earlier this year). I don't know of other restrictions, other than exporting technology restriction which every once in while I hear the govt is doing "something" about. The only "force" which can move this towards a reasonable direction is market pressure outside the US.

"Getting American launchers for the price Russians already have will take some work. Getting prices substancially lower than what the Russians already have will require either a huge increase in launch numbers or radically new technology. I'm not holding my breath on either one. "

I think Sea Launch is a promising approach to solving the low cost of Russia launchers [though there are problems with this also].
As for getting prices substantively lower, I would be satisfied with steady progress in this area. I believe there are much room for cost reduction without requiring "exotic" launch systems. I would say the biggest obstacle remains to be various restrictions placed on the industry by our (and other) governments. The simple fact that any launch vehicle CAN be viewed as a delivery system for weapons of mass desruction is a big problem in this regard. Related to this problem I see government investment in systems such as MagLev assisted launch system as one way to get "around" this (and yes, btw, I know that MagLev is an exotic launch system:).