[TMWNN]

>How much of a setback would disaster be?

SpaceX has followed a tech startup-like model of iterative development AKA "move fast, break things", in which many rockets go boom and (as saberdancer said) every boom is studied to reduce the odds of the next one go boom. Basically an edit-compile-debug loop writ large. This is why SpaceX's official countdown schedule states "excitement guaranteed" at T-0:00.

>Would SpaceX keep going, or would failure leave room for competitors to take over? (If there are competitors? I don't even know tbqh.)

As saberdancer said, there is no serious competitor. Rocket Lab has achieved ~~reusability~~ recovery of small rockets and has a good launch record, but a) has not yet figured out how to get them to land other than on the ocean and b) can't launch them weekly/daily like SpaceX. Bezos's Blue Origin actually landed rockets before SpaceX, but only suborbitally. ULA (US) and Arianespace (Europe), the two large commercial-payload providers pre-SpaceX, aren't at the point of test launches of any reusable rockets.

The above is all before Starship, which if it works will give SpaceX a) a fully reusable launch vehicle (existing SpaceX rockets' upper stages aren't reusable), and b) the ability to launch gigantic payloads. The combination of the two will further massively cut launch cost. I've read that even if Starship is fully expended, it will still be the same $2700/kg that existing SpaceX rockets cost, with that aforementioned gigantic payload capacity.