At some point SpaceX will reach the limits of how efficient they can get as dictated by physics. Their competitors will get there eventually, maybe decades later. But eventually the market will mature and they will become competitive. Same as any other industries, smart phones, electric cars, etc.
It's not about physical efficiency of the rockets so much as it is about their reuse. When you launch a rocket, fuel costs are basically a rounding error - well under a million dollars in general. Nearly all of your costs come from the rocket itself. And before SpaceX we were simply throwing away these rockets after a single use. Well technically the Space Shuttle was "reusable" but the refurbishment required was so extensive that they may as well have been rebuilding it from scratch after each launch. This is why SpaceX's audacious initial goal of reducing space flight costs by orders of magnitude was completely viable.
I think companies will have difficulty competing against SpaceX, so long as SpaceX is ideologically motivated. Right now their goal isn't to make a ton of money, but to create a stable civilization on Mars. So once we start headed to Mars them making next to no profit on launches, beyond what's needed for development and basic sustainability, would be perfectly fine. So you not only need to hit technological parity, but then somehow also go well beyond them in terms of cost reductions - at least if your motivation is profit.
Not to mention that 2 out of 5 Space Shuttles suffered catastrophic loss, one of them (Columbia) almost certainly because it was being reused and the heat shield failed.
Columbia didn't fail because of heat shield reuse. It failed because a chunk of foam crashed into a important part of the heat shield at high speed and created a big hole.
I’m always deeply skeptical of appeals to the “laws of physics”. Yes, there are some hard constraints there, no, it doesn’t account for bright ideas for how to make those less important; the laws of physics stop us shrinking vacuum tubes small enough to fit billions on a chip, but it turns out that that doesn’t actually matter
The cost to develop in the first place may be too high, except for maybe nation states.
Falcon 9 funded Starship. Now there is little funding for a competitor, ignoring the fact that Starship will sink that even closer to 0 with such low launch costs.
BlueOrigin is not making money but investing more then most nation states. In fact, Bezos is single outspending Europe in terms of rocket investment. Bezos invested way more in New Gleen then Europe in Ariane 6. Not to mention outspending India whole space budget.
You believe conventional turbo boosted rockets are the end game of space travel?
There is a lot more to come I can tell. at least 200 years of development if not more with current knowledge.
What will ultimately limit SpaceX, and launch in general, is deposition of water (either water in the rocket exhaust, or water from later oxidation of unburned fuel in the rocket exhaust) in the upper atmosphere. The stratosphere and mesosphere are extremely dry, so this limit is lower than you might think.
