He's got some good insights, but I think he's working too hard at it.

It is not that difficult to design low cost launch systems. I just finished working on a concept using reusable surplus Russian engines and an expendable tank that worked pretty well, and wouldn't take a lot of money to get off the ground.

Problem is the market. The "chicken and egg" problem the author refers to is a real one. You aren't going to sell to a low-cost payload market until the vehicle is built and flying. And the high cost market (comsats and other multimillion dollar satellites) frankly doesn't give a rat's rump about launch costs in their big financial picture.

Best analogy is the computer industry. When personal computers were in their infancy, most people were using large, room-filling units. They got the job done. They were sold to the government, universities, and large corporations. There was no incentive for companies like IBM to build desktop machines, even when the chip technology became available. Why would a large corporation buy one?

It was hobbyists who started building them in garages, just for kicks, largely, and then they eventually found a market in database, word processing, games, and many other applications. The industry could boostrap itself up from almost nothing.

The rest is history. IBM played catch-up when the market became obvious, but IBM would NEVER have come up with the personal computer on their own. No one there could think that way. Which, incidentally, is why Boeing and the rest of the aerospace giants don't come up with cheap spaceships, a fact that frustrated me no end in my younger days. They don't need to, and, more importantly, they don't think that way.

Where this computer analogy obviously breaks down is, how the hell does a hobbyist build an orbital rocket in his garage?

We may be seeing an incremental step in this direction. It is not impossible for a group of amateurs (using the word in its original sense) to build a SUBORBITAL rocket in their "garage." And a number of them are doing this. This may open the way to further growth. I'm hoping that we see some progress from those X-Prize contestants whose designs have orbital growth potential. Unfortunately, Rutan's is not one of them, unless he has another surprise in the hangar.