My current partner in crime here, Sam Dinkin, has some interesting ideas about how to encourage space activity and drive down costs over at The Space Review today. I don't agree with all of them, and I'm sure that in some cases there may be some bad unintended consequences, though I haven't given them enough thought to identify any yet.

I like the idea of subsidizing EELV at the margin. Government policy in general doesn't seem to understand the concept of marginal cost (one of the reasons that both Shuttle and ISS are programmatic disasters), and a more explicit recognition of its importance could have some good policy outcomes.

I'm not sure what he means by "privatizing ISS and Shuttle," I think that the infrastructure to maintain both of them is too expensive for anyone to operate at a profit, even if they were given away.

As the only reasonable inference from your apt assessment of the commercial prospects of shuttle and ISS if they were privatized, I expect that Shuttle would be scrapped and ISS fully depreciated and accepting tourist flights. Possibly barely making ends meet like Mir just before the end.

Privatization is a conventient euphemism for cancellation. It allows the blissfully ignorant proponents of Shuttle and ISS to believe something constructive will come of it besides jobs in Congressional districts. It also forces proponents to point out to me that Shuttle and ISS are commercially worthless and could not survive without heavy subsidy if they want to proceed to a more nuanced argument. I view that as already having won the debate. We will see if there are 6 flights, 28 flights or some other number.