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I think the problem you are going to find privatizing the space industry is where the solid profit is. Typically things like this (especially when the money (some would say) should go to more worthy causes) need to have a solid return in the investment of its shareholders and companies.
Heck even the Spaceship one stuff is only happening because some rich people are giving the majority of the funding.
So like other things like this the Government will fund away... Profit? who needs no stinkin' profit.