If it is the former, do they think they will be able to adequately calculate a risk percentage for the re-launch? I would assume that if a client is going to be the first test dummy for this process, that they will negotiate significant rate decreases based on the perceived additional risk and the cheaper cost associated with reusing the booster.
I like being able to use the term "re-flight".
Edit 2: per mikeash, it's definitely flyable (i.e. I'm wrong), but it'll still be grounded to aid with testing efforts. Thanks for the correction, Mike! https://twitter.com/elonmusk/status/734274360588926976
From what I understand there was heat damage around the engines.
The good news there is that it might mean the rocket can be rehabilitated if needed since structural damage would be less likely.
According to the latest Musk tweets today's rocket was actually somewhat damaged in the landing - the scrificial "crush core" was, well, crushed.
Edited my comment with source tweet from Elon.
https://twitter.com/elonmusk/status/731984739012251648
It's very likely not going to fly again.
Edit 2: per user mikeash, it's definitely flyable (i.e. I'm wrong), but it'll still be grounded to aid with testing efforts. Thanks for the kind correction, Mike! https://twitter.com/elonmusk/status/734274360588926976
I would think if damage was within tolerances (even at the maximum of such), they'd be willing to relaunch. Implications from the tweet and subsequent conversations are that the damage exceeded thresholds to guarantee safe future flight, which is why they'd use it for testing on the ground.
I'd still read his tweet as meaning it's "too busted" to fly, but I suppose it's up to each person's own interpretation. Your point is well received.
https://mobile.twitter.com/elonmusk/status/73427436058892697...
It's being recruited as the testing leader because it represents the extreme, not because it's grounded.
Check your sources. Max damage meant upper limit of the range of expected damage.
4 including todays one, granted nothing wrong happens in transportation.