The high lift ballute has potential, but there's considerable weight and complexity and it does not look reusable. As I mentioned below, a heat shield is just a device to accept aerodynamic heating. A simple spherical ballon trailing behind the vehicle can also absorb a lot of the thermal load if it has sufficient frontal area.
There is a lot of healthy speculation here. Personally I would be suprised if it works. The second stage has four times the velocity and 16 times the kinetic energy per ton as the first stage. But there are several innovative solutions and Musk is not afraid of failure. Better heat shielding around the base of the vehicle, larger grid fins at the nose that can create a lot of drag and thus take some of the thermal load off the base structure, running the engine during entry to deflect hot plasma away away, abaitive paint, and perhaps releasing a simple spherical ballute on a long shroud line to trail behind tthe vehicle and absorb thermal energy are all possibilities. A heat shield does not have to be in front of the vehicle; a ballute that trails behind it can provide drag and accept a lot of the aerodynamic heating.
Many years age a company called Reaction Motors built the first big, reusable liquid-fueled human-rated rocket engine, the XLR-99, the engine that powered the mighty X-15. Then Thiokol (now OSC) bought Reaction Motors and ultimately shut the company down. So much for the value of reusability.
Big, segmented SRBs are cheap to develop but expensive to process and impossible to economically reuse. They also have failure modes that are very hard to prevent. Missiles are smaller and use a different solid propellant. With the exception of politics, it does not make sense, in 2016, that we are still using SRBs.
A study by Jay Penn of the Aerospace Corp. found that sales would increase considerably if the price could be brought down to ~$1M, which is not impossible with fully reusable systems.
Someone proposed that to NASA during the Shuttle era and was turned down, but times change.
As one fellow who worked many years in booster retrieval put it, the SRBs were not even refurbishable, they were "salvageable". Between uses the SRBs had to be totally disassembled, the components sand-blasted to remove plating and paint, the parts magnafluxed, inspected, replated and repainted, and reassembled.The asbestos insulation had to be removed by hydrolazing (basically a 15,000 psi pressure wash) and the entire rocket had to be reassembled, including the tedious and hazardous stacking of fully fueled segments in the VAB. That's part of the reason SX has worked so hard to keep the booster from getting wet.
Increased demand increases sales, but it also increases cost, because the supplier can charge more for the same product. If the demand is elastic with changes in price, however, a manufacturer that is willing to reduce price will see increased sales. In the government market total sales are usually fixed and a company can only increase sales by taking market away from an existing supplier (as SpaceX is trying to do with ULA in the DoD market). However in the commercial market reduced price may actually increase total market sales.
Although I believe you meant it as jest, this is the largest obstale to US-China cooperation, the pervasive view that a new confrontation between nuclear powers is a good thing because 1) conflict will bring fundign for a new space race, and 2) China is our eternal enemy so naturally we should do everything we can to avoid even communicating with them.
This view is wrong. The US and indeed the world cannot afford another generation on the nuclear precipice. We only have to look at our nation's economic status; we cannot afford to spend more than the rest of the world combined on armaments, and we should never return to a world where nuclear annihilation could come on a moment's impulse. The original goal of the ISS, to act as a catylist for international trust and cooperation among the world powers, requires that we invite China to participate.
It may be impractical to keep two large stations co-orbital because of the difference in drag and orbital drift. As soon as the stations are at different altitudes precession rates will be different and they will drift out of plane, even if they are at the same inclination.
A similar concept was at one time proposed for the OSC Pegasus air launched satellite launch vehicle. However in general ramjets have a fairly narrow range of airspeeds at which they generate thrust efficiently, and the one thing a launch vehicle never does is fly at a constant speed. Hence ramjets are appropriate for missiles like the Bomarc (Boeing/Marquardt) antiaircraft missile which required an extended Mach 3 cruise, but not for a launch vehicle which has to continuously accelerate.
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Medley