Well, they have flown to orbit successfully twice now with Falcon 1. Few companies have managed that.
That's true. But there have been other companies that have done it and gone bankrupt or quit. Look at the Delta III or SeaLaunch. My point is that there seems to be a group of enthusiasts who let their enthusiasm run wild and fail to recognize that many other companies have tried this and failed. SpaceX is not guaranteed success.
I don't know if one can really expect *that different* results compared to previous aerospace companies if SpaceX's problem solving methods are mostly similar. Some competition is healthy, if the industry does not get overfragmented.
Those are two valid issues. The first is that there seems to be a belief among some enthusiastic space, er, enthusiasts, that SpaceX will be able to do things fundamentally differently from every other company out there. But the laws of physics have not changed. Now from what I understand, SpaceX intends to lower their costs in several ways:
-building most of the vehicle in-house, thereby eliminating the overhead and profit-taking that happens for all the components that they have to buy
-using a younger workforce (as I understand it, their engineering workforce is younger, but their technician workforce is a little older, which seems like a good approach--put the experienced hands to work actually building the hardware)
-streamlining operations and taking advantage of modern technology whenever possible
-reusing engines from the first stage
Those all save a bit. But even cutting costs in half does not actually make a big dent in the launch business. They can potentially bring the cost of a Falcon 9 launch down to around the cost of a Delta II 8-10 years ago, which will make a lot of people happy, but doesn't open up the solar system (after all, we weren't building colonies on Mars using inexpensive Delta II's either).
There's something else that is relevant, which is how many launches per year SpaceX needs in order to be viable. I talked to a guy who used to be a senior aerospace executive and used to essentially run one of the big rocket building companies. He said that if SpaceX's model assumes that they can sell X number of rockets per year and they are only able to sell X-1, the question is what does that do to their profitability? Does it wipe out their profits? At the moment, SpaceX claims that they need to sell four launches a year and they think they can do that. But by when? They're already a few years behind schedule.
The second issue you raise is also an important one and it's hard to know what is going to happen. At the moment there are too many rockets chasing too few payloads. But because the fixed costs for the rockets are high, this oversupply has not resulted in lower launch costs. (In other words, this is not a traditional market.) SpaceX has assumed that if they build a cheaper rocket, more payloads will emerge. But this "build it and they will come" approach to markets is usually a fallacy.