Or we could build a cheaper telescope that is less redundant more quickly, and launch a new one every 5 years. Launch prices are falling, so this could be more economical than building expensive long-lasting telescopes.

There's several problems with that approach. The first is there's going to be a minimum size for a telescope to be useful as a scientific instrument. For a telescope intending to be in any way a contender for Hubble's mission it would need a primary mirror a meter or more in diameter. Then it needs reaction wheels for precision aiming, RCS, instruments, electronics, and power.

At a minimum you're outside of "smallsat" size range. Even building a lot of them the precision manufacturing of the optics and steering systems require a lot of ground based testing, calibration, and qualification. Between the size and precision even your "cheap" Hubble's aren't all that cheap.

The second problem is terrestrial telescopes have gotten really good and are far cheaper for any given mirror size. Their instrumentation doesn't have nearly the same mass restrictions and can be swapped out routinely.

Space telescopes make sense when their mission requires them to be space based like observing wavelengths that don't reach the surface of Earth.

Also swarms of telescopes that can collectively take higher resolution, broad spectrum photos.