[Retric]

The end product from a hydrogen fueled rocket is H2O. Of which oxygen represents 88.8% of the weight so there is a lot of weight savings available to make up for the increased drag and a more complex engine design. Also of note you need to accelerate not just the ship and cargo but also all that unspent fuel so weight savings tend to multiply.

An air breathing rocket that hit's Mach 5+ means on the order of 30% less fuel and less structure to support that fuel. Which not only allows for more cargo but significantly more redundancy and a much higher structural safety margins.