SpaceX already got a large contract with NASA to haul cargo up to the International Space Station when the shuttles retire in 2010. So it seems that even the government admits that these guys can do it better for cheaper:

http://news.bbc.co.uk/2/hi/science/nature/7800721.stm

Slight correction: the government admits that SpaceX can do it better and cheaper if they can deliver on their predictions. NASA is paying for a series of test flights to determine whether or not that's actually the case.

Remember, the Falcon 9 hasn't actually launched yet (although much of the design is shared with the Falcon 1). I'm really looking forward to its first test launch, which should be coming up before just too long. Their ground crew overhead is impressively low.

SpaceX already has things in place to provide the service and their bid was better (1/2) than the Russians' bid.

And unless government regulations unduly restrict space travel. I don't know why they would, given that it's essentially just like airplanes, yet much higher.

Valid reasons for government regulation of space travel 101:

1. We have a technical term for a simple, rapid-to-launch vehicle (like Falcon 1) that can deliver c. 400Kg into LEO: we call it an ICBM.

2. Even in the absence of a CBW payload, a well-targeted RV can do a hell of a lot of damage. KE at orbital velocity is an order of magnitude higher than the equivalent chemical energy stored in the same mass of TNT, so even if that hypothetical 400Kg payload is cement, it's going to do one hell of a lot of damage to anything it hits.

3. Accurate targeting of RVs was considered to be a very hard problem ... in the 1940s and 1950s. Let us recall who the initial cash cow customers for Fairchild Semi and (subsequently) Intel were, and consider the implications.

Anyway, upshot: no government in their right mind is going to allow orbital launches (or even sub-orbital) without at least some oversight, if only to ensure that the customer isn't Dr Evil.

Good and valid points.

I think the GP were mostly thinking about the red tape and administrative problems that had to be surmounted.

(Stross? Really likes the books!)