"I could put up one friggin' big Space Hotel, for starters. The kind that spins."
How much would the govt charge to lift your Hotel? Maybe the govt wouldn't want a hotel in space. Wouldn't it increase use of the Orion & cause a increase of radiactivity. Wouldn't it be better to put more important things in space than some hotel. If the govt put one hotel in orbit, would it be "required" to put up more hotels? Wouldn't this cause even more use of the Orion?
Unless you are willing to have these Orions owned and operated by the private sector, the private sector won't have CATS. Socialism will never colonize the solar system.
Also the cost of the Shuttle, doesn't include the development or building the orbitor- the 500 million is operational cost. The cost of fuel is insignificant- even the marginal cost is not that significant, it's mostly all the people associated with launching the Shuttle and getting it ready for the next launch. It's very probable that a govt built and operated Orion would have a very high cost per launch- now, you would get a lot more payload than Shuttle but the per launch cost could easily cost more. You might have a situation where the Orion had say a cost of 1 billion per launch and at price per lb of $100- which does not mean that that the govt would sell to anyone at $100 per lb. Maybe they would think that the price should reflective of the true cost plus give some profit back to the tax payers, which means that after getting permission and filling in all the paperwork, they might be willing to sell it to you for $500 per lb.
Unless you have a competitive launch market, the price can be fairly arbritary. If you think the govt is going to allow private launch of nuclear spaceships... well, I would like to hear the details:).