Is that their line? Musk companies have used that excuse a lot when they actually can't do something (see Tesla FSD). During the test flight, they called that orbital insertion was complete after they ran out of fuel (long before reaching orbital velocity), so I'm not buying it.

Also, at that altitude, there's enough drag that you can de-orbit a big metal can pretty easily by simply pointing it in a high-drag orientation. Most LEO satellites do this when their missions are over, and it takes a couple weeks.

They were venting excess fuel for some time after final trajectory insertion. There's no real question they could have achieved orbit handily.

Are we talking about the same test flight? They did not "run out of fuel" on IFT 3, maybe you are confusing with IFT 2 from last November?

Yes. "Starship engine cutoff" was called at 26,600 kph at 155 km altitude, when the fuel gauges for both LOX and CH4 on the stream were at 0. That altitude needs 28,000 kph for orbital velocity.

A sister comment mentioned "venting excess fuel," which I don't believe was in the flight plan, but I would believe that the craft was leaking fuel given the clouds of gas around the thing on all the camera views (and the excess rotation in flight). That would explain how starship failed to make orbital velocity and still ran out of fuel.

Presumably, if there was a leak and they fixed it, there wouldn't be any problems getting to orbit. But the fact of the matter is that they didn't reach orbit despite trying (getting into LEO was in the published plan), and the fuel gauges got to 0 before they got there.

It's very possible that the valve between the tanks for the in-flight fuel transfer test (which didn't seem to happen successfully) was broken, so it's not actually a problem with starship at all, but a problem with the experimental setup.