I think that paragraph in particular has a framing error. Delta Clipper, X-33, etc. could not have been continued by the private sector because government programs are rarely what a private would do. On the one hand they try to solve technological rather than economic problems. Look at what SpaceX did: they developed little in raw technologies in the beginning, as they were solving for a high end requirement (X tonnes to LEO for cheap, cargo upmass and return, etc.). You only develop the tech you really, really need.
Government programs, on the hand, try to cram new technologies for impressive datasheets. Very rarely that generates the lower cost to an actual requirement.
Look at the Shuttle Program, even for a government program, the reasonable thing to do would have been to put HL20 or a minimal Dynastar on a Titan III, and work on making sure you could reuse the SRB and the lander first, then work your way up from there... if SRB reuse proved actually cheaper (which it wasn't). An even better way was SpaceX's way, but it is questionable if it would be doable with 70s tech.
Instead of small steps to check if that was the cheapest and most reliable way, we got the Shuttle. The direction was set from MFSC omniscient tradeoffs, and then "made it work". At no point was questioned "why are we doing this?".