>Cheaper and larger payload capacities will ultimately change the industry ... is there sufficient demand there for this ambitious launch vehicle? What else will it be used for?
extended weekend around Moon in cattle class for say $100K/person. Suborbital flight LA to Shanghai in 1 hour for $5-10K. Though it seems that the first years the SpaceX Mars program will gobble almost all the capacity (according to that recent update Elon wants to launch non-stop several times a day to get several million tons into orbit), except for the high margin and/or already contracted stuff like NASA Moon.
>The real problem for Starship (IMHO) is Falcon 9.
F9/Heavy are cheaper than competition, yet not that cheaper to enable new revolutionary uses. They also will never be made to the airline level of safety/robustness/operational simplicity/etc. which is one of the goals of Starship and its Raptor 2 engine.
In particular - according to that https://en.wikipedia.org/wiki/SpaceX_Raptor#/media/File:Rapt... the full flow allows them to run turbines under 600 C for fuel and under 500 C for oxygen pump on Raptor 2 - it feels like cheating :) being like steel temperatures, and they of course are using Inconel which gives them great reliability here, like in order of magnitude better than on other engines. That naturally translates into capability to perform many reuses with very frequent launches with minimal operational costs.
If anything i think with Elon having blazed the path there is an opportunity to quickly start and ramp up SpaceX copycats(s) as whatever capacity the industry would produce at the Starship level low prices and high convenience the demand will still be bigger.