"The stagnant NASA of the past 20 years has been poised to become a very new NASA — thanks, in many respects, to the outgoing Bush Administration. In 2004, the President announced a new push to return astronauts to the moon and eventually get them to Mars. Many skeptics saw the hand of political whiz Karl Rove in that, suspecting that the whole idea was just a bag of election year goodies for space-happy states like Florida and Texas, as well as for voters nostalgic for the glory days of Apollo. But Bush, NASA and Congress did mean business, and eventually came up with a plan under which the space station would be completed and the shuttle would be retired by 2010. That would free up about $4 billion per year, which would be used to pay for a new generation of expendable boosters as well as a 21st century version of the Apollo orbiter and lunar lander for those rockets to carry."
http://www.time.com/time/nation/article/0,8599,1866045,00.html

Interesting take by a Time writer. I would say more serious than some were saying they were. But Bush priority has been on keeping American safe from another terrorist attack and couldn't afford too much political capital or time on other matters. And Congress doesn't get very good grades in the matter. Not horrible but not stellar.
I would say Bush's selection of NASA administrators was pretty good.

But more interesting is this:

"Garver's lack of engineering cred is especially surprising in light of the eggheads with whom Obama has been surrounding himself — most recently, Nobel prize winning physicist Steven Chu, who has reportedly been tapped to be Secretary of Energy. Garver is also not thought to be much of a fan of Griffin — who is an engineer — nor to be sold on the plans for the new moon program. What she and others are said to be considering is to scrap the plans for the Ares 1 — which is designed exclusively to carry humans — and replace it with Atlas V and Delta IV boosters, which are currently used to launch satellites but could be redesigned, or "requalified," for humans. Griffin hates that idea, and firmly believes the Atlas and Delta are unsafe for people. One well-placed NASA source who asked not to be named reports that as much as Griffin wants to keep his job, he'll walk away from it if he's made to put his astronauts on top of those rockets."

Well, yeah, the Atlas V and Delta IV are unsafe at the moment. But doesn't mean Boeing and Lockheed can't make them safer. And does Griffin imagine there is a good chance Ares 1 is going to be safer launcher when the first one is built and is sitting on the pad?

Now, I like the backstop idea of NASA building it's own rocket. A launcher is part of a critical path as for as the Lunar manned program [and Mars]. So, NASA shouldn't be dependent upon one supplier or even two suppliers- who could have higher priorities than NASA's Lunar manned mission. So why wouldn't you spend a few billion dollars to ensure that your tens of billion or hundred billion program is not delayed- not to even mention ISS.
And besides all this, you have a Job's program to manage.
Yeah, Shuttle is a waste of money- but it costs money because it is part of a job program. It's going to be painful to end the Shuttle program, mitigating that pain is not a bad idea.
Another way to look at it is the that NASA can "afford" to not be competitive- private sector can't afford this.

There are other ways to do this, but you simply can't say shuttle program cost "X" money. End shuttle program save the "X" money, so you spend it on "Y".

So, I been a big fan of using private launch. But I see NASA as becoming a bigger agency, so NASA workforce needs to have time to be able to transition from various tasks to other tasks.

So, NASA should be looking at using private sector heavy launch capabilities. They should see the NASA launcher as insurnace, and if "you guys aren't going to provide us with the launcher we need", we got one we could use instead.
And if the Ares 1 doesn't fly crew or only flies a few crew, it's still worth it- it means the private sector is providing a better or at least equal launch. And if Ares 1 is not a failure, and NASA is getting launch it needs from private sector why can't NASA sell or spin off the Ares 1, to some private or even non-profit company?