No, it is not ludicrous.

As Elon likes to point out, imagine how expensive it would be to fly if, after every flight, they threw away the plane. That's exactly what people traditionally did with rockets. The result is that the cost to fly a jet is mostly the cost of the fuel, while the cost to fly a rocket is the cost of the rocket.

Consider a Falcon 9 launch. Thanks to reuse, the cost to relaunch is in the neighborhood of $30 million. The cost of the fuel is about $200,000. Over 99% the launch cost is depreciation, maintenance, or having to replace what you didn't reuse.

The aim with Starship is to make the cost of a launch as close to the cost of the fuel as they can get.

I’m not sure you understand the arguments being made here. $1m per launch for F9 is ludicrous because 20% of the rocket, by manufacturing cost, is expended on every launch. For Starship none of the rocket is expended per launch, the only costs are site operations, fuel and depreciation on the rocket over a hundred or more flights.

They are aiming for daily launches of starship, so the site operations costs would be divided by potentially hundreds of launches per year instead of the one or two dozen a year nowadays.

The cost model per flight of Starship is more like that of a jumbo jet than that of a Falcon 9.