Pretty sure that SpaceX is focused on reliability. One of the analogy that Elon Musk used is comparing a Honda Civic versus a Ferrari, asking which is more reliable.
Historically, rockets are focused on performance, not cost.
SpaceX's focus on producing cheaper rocket and launching more of them will yield more reliability. You make more of them, you make more mistakes, more opportunities to correct them.
Eventually you'll have a system for making very reliable rockets.
Accepting lower reliability of rockets doesn't buy you as much cost reduction as you might expect. Payloads are usually very expensive, so even a moderately increased risk of losing one can be pricy.
What SpaceX is doing is accepting worse performance in exchange for lower cost. Hopefully that'll make things more reliable in the long run, rather than less, since they won't be pushing the envelope quite as much as competing designs. (Remember the Space Shuttle Main Engines, which had to be practically rebuilt after each flight? That was done in order to get the amazing performance needed to make the Shuttle work at all.)
Historically, rockets are focused on performance, not cost.
SpaceX's focus on producing cheaper rocket and launching more of them will yield more reliability. You make more of them, you make more mistakes, more opportunities to correct them.
Eventually you'll have a system for making very reliable rockets.