> Simply evolving the Saturn 1B (which was cheaper, per lb of payload to orbit, than the Saturn V) could have easily beaten the Shuttle's economic performance.

I don't know how much it applies, but sometimes evolving something requires switching out components for other ones, which are more expensive. Not everything scales. Marketing isn't the only reason why 50% more capability often costs 100% more. I imagine with rocketry, you're often operating at the edge of the capability for certain materials and approaches.