[pjscott]

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.)