"To be honest, no one is stopping the private sector from advancing into space AND sustaining that goal, the thing is... can they?"

It's untrue that no one is stopping this. There are lots of laws [some laws which I could even agree are "proper"] which hinder this. You can stop someone from doing something by simply not doing something. If people park their cars in the middle of the street, this would stop me from traveling on the street.
So, for example the lack of making policy regarding Lunar property rights, can be something that is stopping people from going there. Of course the rules existing can also prevent it, and any further laws could do more to prevent it.

But with all the above said, the privater sector is "advancing into space". The private sector is doing more than NASA is at this point, and has been doing more for decades.
More payload is being lifted into space by the private sector than NASA- which has been true for decades.

In addition we have SpaceShipTwo and couple others are planning to sell suborbital tickets. If that "works" then we will have very significant step in the direction of "advancing into space".
And of course, considering that tax dollars come from the private sector- everything is being driven by the private sector.

"I think that what you're proposing is a joint venture between the private sector and NASA to launch space vehicles. Is that what you're getting at, gb?"

Well, I'm suggesting that NASA get into space at a lower cost, and that by buying more private launch it can get more payload for less cost to the tax payer.
In addition to this, I'm suggesting that NASA not look at it's launch in the same way that private sector looks at launch in terms of costs. In other words for the private sector the more launches it can get, the lower it can make it's costs.
This same dynamic is not true in regard to a govt agency- NASA doesn't necessarily get more money for more launches per year. It's source of money is how much Congress gives it per year.
So, NASA can easily afford not to use it's launcher in a "cost effective manner" as the private sector would see it as cost effective manner.
Because NASA source of money is not from customers, NASA will not seek actual cost effective solutions as much things that might *appear* as cost effective.