Summary: Orion wasn't going to work, so it's good Obama canceled it. He's looking forward to private industry solving all the problems while NASA works on interplanetary stuff. He thinks the president's upcoming speech about space is going to be important, so to stay tuned for it.
It's interesting that after so many years they are actually going back to the old capsule design. I guess people are starting to realize that the Space Shuttle program may not have been actually worth it when you consider Saturn V's near 100% mission success and the fact that the Space Shuttle had two catastrophic failures.
The Space Shuttle program has had 130 launches. The crew died twice. That's a failure rate of around 1.5%. The Apollo program had 11 launches and no loss of life... as long as you don't count the three astronauts who died on the ground in the Apollo 1 fire.
Assuming the same failure rate of 1.5%: (1 - 0.015)^11 = 0.84. That means that if the Apollo program was just as (un)safe as the Space Shuttle program, we would have an 83% chance of seeing no loss of life in the Apollo missions.
The Apollo program had the advantage of using big dumb boosters with no reusable parts, but the Space Shuttle program got to use newer materials and better engineering techniques. I'd estimate both were about equally unsafe. A 1% chance of death is way too high for any sort of civilian transportation. A simpler design (capsule + big dumb booster) with modern engineering and materials would be much safer than both.
You make some interesting points. I'm not sure what the failure rate would have been if the Apollo program were allowed to continue with the same design (albeit better materials and engineering), but its probably incorrect to assume it would be the same for the two craft because they are fairly different designs and have different physics (i.e Shuttle rocking back and forth before launch is due to its "piggybacking").
However the two most significant design changes that would have reflected far different failure rates are: 1) Change in fuel type and 2) Presence of an abort sequence.
1) In the Apollo design, the rocket was liquid propelled, thus it could have been shut off (theoretically) at any point in the launch sequence. The Space Shuttle by contrast has Solid Rocket Boosters, which once lit, do not turn off.
2) The Apollo rocket had an escape rocket mounted to the capsule that could have been fired and brought the crew to safety in the event that 1) did not occur. The Space Shuttle by contrast cannot enter into an abort sequence until those SRB's are done firing.
Apollo 1 should count. Gus Grissom had been to space twice. Ed White once. They were the top candidates in the program at the time. The accident was clearly related to space exploration and the Apollo program. When we lost those astronauts it directly effected the outcome of the Apollo program since they were going to continue to actively participate in future missions. [1]
As for the space shuttle, it is a failure of both complexity and the inability to adapt. Had it been either less complex or more adaptable it would have had a different fate.
All of that being said it was designed to last 10 years or 100 missions[2]. That should be read whichever comes first. So all the reliability engineering that was run on the parts in the 70s did not assume the same parts would still be in use in the 00s. Such an accident should be expected when using hardware that was designed to have been retired over 10 years ago.
My own take on it is the Apollo program was more dangerous and we were relatively lucky. Meanwhile the shuttle program was safer yet we didn't follow our own rules and got burned. Whether it's launching outside of recommended temperatures or running shuttles for twice as long as they were designed for...
