Clark Lindsey has some thoughts on the late Kistler concept, with which I largely agree:

I’ve never thought the K-1 design that they came up with was anywhere close to an ideal RLV. For example, it doesn’t allow for incremental testing to find problems without losing the vehicle as Rutan could do with the SS1. However, it was a proof of principle that even a group of conservative NASA/Apollo/Saturn engineers could sit down and design a two-stage-to-orbit (TSTO) fully reusable vehicle without breaking any laws of physics or requiring even an ounce of unobtainium. Other than the occasional anonymous commenter posting “the K-1 is crap” sort of criticism, I’ve never seen any credible person point to some particular part of the K-1 design and say this definitely is not going to work.

Kistler got 75% of the hardware built for the first K-1 when their target LEO comsat constellation market disappeared and funding dried up. Kistler had at that point spent about $800M but raised only $600M. The company itself had remained relatively small and had farmed out most of the hardware to various mainstream aerospace companies. (SpaceX decided that building many of its major components in house could save lots of money over this outsourcing approach.) People who were involved with other entrepreneurial launch vehicle companies during that period occasionally express annoyance, to say the least, that Kistler Aerospace soaked up most of the private investment available for such ventures yet still didn’t get anything into the air.

I always thought that it was a mistake to hire Apollo retreads for the job. George Mueller and company knew how to get the job done on an unlimited budget, but they didn’t have one (though they had a lot more money than anyone else). There was never any reason to think that they could do things cost effectively. My understanding is that the investors demanded that “space experts” be brought in. Unfortunately, the “space experts” they brought in simply farmed the job out to cost-plus contractors, because that’s all they knew how to do.

Whether they really “soaked up all the private money for such ventures” is hard to know, because the investors that were willing to put money into Kistler weren’t necessarily willing to put money into a company that didn’t have old Apollo hands running it. So perhaps that was their loss, not the industry’s.