A co-worker of mine was involved in some second generation RLV studies with Boeing and Lockheed-Martin. They tried everything under the sun to reduce launch costs but nothing seemed to work. A big problem is the development cost versus operations cost. This is what killed the current Space Shuttle economics. The Shuttle was originally targeted for $1000/kg. but the development costs got too big. The bean counters got involved and fouled things up nicely. They deleted the reusable booster and went to the External Tank and the Solid Rocket Boosters. Going to a partially reusable system, halved the development costs (saved about $10 billion). The argument was the increase in operations cost over the lifetime of the Shuttle fleet was less than the extra required for development cost. The numbers were cooked of course and the whole cost saving argument was specious (not that the bean counters cared).

I suspect it is possible to get down to $100/kg. but the engineers need to sneak up on the solution. The current situation is like expecting Orville Wright to design a 747 on the first pop. Many aircraft designs had to evolve from the Wright Flyer over many years into a 747, taking many wrong turns in the design process. Maybe where we got it wrong was in cancelling the X-20 Dynasoar. The X-20 was based on X-15 design heritage. The X-20 itself was a reusable winged vehicle that was launched on a Titan-2. The last X-20 design before project cancellation was flawed because they hadn't figured out how to properly zero-out the orbit vehicle's lift during ascent (they had a stupid design with big wings on the Titan-2 first stage). If they had fixed the ascent lift problem and stuck with the X-20, maybe they could have evolved it into a fully reusable vehicle. Maybe that is what we need to do now?

Gary