It's a long article, but the most relevant stuff is at the end, about how we're pretty much locked into the existing rocket technologies:
That is not, however, the most important way that rockets generate lock-in. In order to understand this, it's necessary to know a few things about (1) the physical environment of rocket launches, (2) the economics of the industry, and (3) the way it is regulated, or, to be more precise, the way it interacts with government.
1. The designer of a rocket payload, such as a communications satellite, has much more to worry about than merely limiting the payload to a given size, shape, and weight. The payload must be designed to survive the launch and the transition through various atmospheric regimes into outer space. As we all know from watching astronauts on movies and TV, there will be acceleration forces, relatively modest at the beginning, but building to much higher values as fuel is burned and the rocket becomes lighter relative to its thrust. At some moments, during stage separation, the acceleration may even reverse direction for a few moments as one set of engines stops supplying thrust and atmospheric resistance slows the vehicle down. Rockets produce intense vibration over a wide range of frequencies; at the upper end of that range we would identify this as noise (noise loud enough to cause physical destruction of delicate objects), at the lower range, violent shaking. Explosive bolts send violent shocks through the vehicle's structure. During the passage through the ionosphere, the air itself becomes conductive and can short out electrical gear. Enclosed spaces must be vented so that pressure doesn't build up in them as the vehicle passes into vacuum. Once the satellite has reached orbit, sharp and intense variations in temperature as it passes in and out of the earth's shadow can cause problems if not anticipated in the engineering design. Some of these hazards are common to all things that go into space, but many are unique to rockets.
2. If satellites and launches were cheap, a more easygoing attitude toward their design and construction might prevail. But in general they are, pound for pound, among the most expensive objects ever made even before millions of dollars are spent launching them into orbit. Relatively mass-produced satellites, such as those in the Iridium and Orbcomm constellations, cost on the order of $10,000/lb. The communications birds in geostationary orbit—the ones used for satellite television, e.g.—are two to five times as expensive, and ambitious scientific/defense payloads are often $100,000 per pound. Comsats can only be packed so close together in orbit, which means that there is a limited number of available slots—this makes their owners want to pack as much capability as possible into each bird, helping jack up the cost. Once they are up in orbit, comsats generate huge amounts of cash for their owners, which means that any delays in launching them are terribly expensive. Rockets of the old school aren't perfect—they have their share of failures—but they have enough of a track record that it's possible to buy launch insurance. The importance of this fact cannot be overestimated. Every space entrepreneur who dreams of constructing a better mousetrap sooner or later crunches into the sickening realization that, even if the new invention achieved perfect technical success, it would fail as a business proposition simply because the customers wouldn't be able to purchase launch insurance.
3. Rockets—at least, the kinds that are destined for orbit, which is what we are talking about here—don't go straight up into the air. They mostly go horizontally, since their purpose is to generate horizontal velocities so high that centrifugal force counteracts gravity. The initial launch is vertical because the thing needs to get off the pad and out of the dense lower atmosphere, but shortly afterwards it bends its trajectory sharply downrange and begins to accelerate nearly horizontally. Consequently, all rockets destined for orbit will pass over large swathes of the earth's surface during the 10 minutes or so that their engines are burning. This produces regulatory and legal complications that go deep into the realm of the absurd. Existing rockets, and the launch pads around which they have been designed, have been grandfathered in. Space entrepreneurs must either find a way to negotiate the legal minefield from scratch or else pay high fees to use the existing facilities. While some of these regulatory complications can be reduced by going outside of the developed world, this introduces a whole new set of complications since space technology is regulated as armaments, and this imposes strict limits on the ways in which American rocket scientists can collaborate with foreigners. Moreover, the rocket industry's status as a colossal government-funded program with seemingly eternal lifespan has led to a situation in which its myriad contractors and suppliers are distributed over the largest possible number of congressional districts. Anyone who has witnessed Congress in action can well imagine the consequences of giving it control over a difficult scientific and technological program.
Dr. Jordin Kare, a physicist and space launch expert to whom I am indebted for some of the details mentioned above, visualizes the result as a triangular feedback loop joining big expensive launch systems; complex, expensive, long-life satellites; and few launch opportunities. To this could be added any number of cultural factors (the engineers populating the aerospace industry are heavily invested in the current way of doing things); the insurance and regulatory factors mentioned above; market inelasticity (cutting launch cost in half wouldn't make much of a difference); and even accounting practices (how do you amortize the nonrecoverable expenses of an innovative program over a sufficiently large number of future launches?).
To employ a commonly used metaphor, our current proficiency in rocket-building is the result of a hill-climbing approach; we started at one place on the technological landscape—which must be considered a random pick, given that it was chosen for dubious reasons by a maniac—and climbed the hill from there, looking for small steps that could be taken to increase the size and efficiency of the device. Sixty years and a couple of trillion dollars later, we have reached a place that is infinitesimally close to the top of that hill. Rockets are as close to perfect as they're ever going to get. For a few more billion dollars we might be able to achieve a microscopic improvement in efficiency or reliability, but to make any game-changing improvements is not merely expensive; it's a physical impossibility.
There is no shortage of proposals for radically innovative space launch schemes that, if they worked, would get us across the valley to other hilltops considerably higher than the one we are standing on now—high enough to bring the cost and risk of space launch down to the point where fundamentally new things could begin happening in outer space. But we are not making any serious effort as a society to cross those valleys. It is not clear why.
A temptingly simple explanation is that we are decadent and tired. But none of the bright young up-and-coming economies seem to be interested in anything besides aping what the United States and the USSR did years ago. We may, in other words, need to look beyond strictly U.S.-centric explanations for such failures of imagination and initiative. It might simply be that there is something in the nature of modern global capitalism that is holding us back. Which might be a good thing, if it's an alternative to the crazy schemes of vicious dictators. Admittedly, there are many who feel a deep antipathy for expenditure of money and brainpower on space travel when, as they never tire of reminding us, there are so many problems to be solved on earth. So if space launch were the only area in which this phenomenon was observable, it would be of concern only to space enthusiasts. But the endless BP oil spill of 2010 highlighted any number of ways in which the phenomena of path dependency and lock-in have trapped our energy industry on a hilltop from which we can gaze longingly across not-so-deep valleys to much higher and sunnier peaks in the not-so-great distance. Those are places we need to go if we are not to end up as the Ottoman Empire of the 21st century, and yet in spite of all of the lip service that is paid to innovation in such areas, it frequently seems as though we are trapped in a collective stasis. As described above, regulation is only one culprit; at least equal blame may be placed on engineering and management culture, insurance, Congress, and even accounting practices. But those who do concern themselves with the formal regulation of "technology" might wish to worry less about possible negative effects of innovation and more about the damage being done to our environment and our prosperity by the mid-20th-century technologies that no sane and responsible person would propose today, but in which we remain trapped by mysterious and ineffable forces.