It's a culture clash. Rutan despises NASA bureaucracy, as any entrepreneur would. But a 100 person company won't put 4 astronauts on the moon or mars... You really need checkers, checking checkers check when you light the fuse and your committed. No pulloff on the highway to orbit! BTW if you want to save about 100 billion bucks, we don't need a new Orion launch vehicle. All we need is a new Apollo capsule and to man rate the Atlas V, or Atlas V Heavy... perhaps 5 bil max. The Shuttle sounded like a good idea 30 years ago, but it's major design flaw was you don't put the passengers next to the propellant. They need to go on top. Enjoy NASA while we have it. Their director, Mike Griffin, is rolling the dice with "all in" almost every launch to meet Bush's mandate. He launched last time over the objection of the safety and engineering chief, and yesterday he rolled the shuttle back to the pad with a hurricane bearing down on it... sooner or later your going to roll snake eyes...
The transition from suborbital to orbital should be doable in a few years. The current design can go to 73 miles, low orbits are what, 100 miles or 200? I'm not real sure but it's in that neighborhood. Engines for that won't be a huge obstacle. If people are going to only be in orbit for a day there would not be much need for magnetic field generators, oxygen generators, electrical generators, all that stuff that the shuttle has, so the weight requirement won't be a whole lot greater maybe. If it was just a one orbit pass they could possibly do it with almost no major mods to the craft. I don't know what they require for a landing strip on the return trip but if they could land at a commercial airport they would have a lot of room for error regarding the reentry timing. I definitely want to take one of those sub orbital flights and a trip to the moon... wow! Not likely I could ever afford the moon flight but I might be able to do the sub orbital thing.