Greg, it's mostly nothing to do with physics; it's economics. It's more
to do with the low market size right now; which in turn is to do with
the current high cost.

It's catch 22. The price is too high, so practically nobody goes.
Because nobody goes, the costs stay high (development costs don't
amortise away, unit costs stay high, production costs stay high.) It's
not that you don't need 10,000 people to go into space, it's just that
if you only send 4 rockets into space with those 10,000 people, then it
costs 2.7x more than if you send 16 rockets into space with, say, 15,000
people.

Basically, rockets are currently mostly built by hand, one off. That's
expensive. Production lines are cheaper. The Russians use more
production line techniques, and their rockets are about 1/4 the cost of
other people. (It has been very, very frequently suggested that low
wages are the reason for this, but people who have gone to Russia report
that it turns out that that only accounts for some, but not all of the
differences; Russian rockets are 1/2 the cost even allowing for this,
strangely enough the laws of physics are the same in Russia as elsewhere).

Physics definitely has a part to play though; it's just that that isn't
the dominant force that keeps the price high as it is right now.