"It is hard to start a space tourism business if the person developing your vehicles is barred from showing the CEO of the company the designs (as happened to Virgin Galactic for a couple years because Richard Branson is not a US citizen"
For the military, that is a feature not a bug.http://en.wikipedia.org/wiki/Sea_Launch#Concerns_and_investi...
Realize anyone with the ability to get to orbit has the ability to drop things on the USA.
Contrary to popular belief, the people in government who make laws and control regulation are not bumbling idiots. Sure, it's easy to make jokes about the DMV or the post office, but the reality is that the person at the counter you interact with doesn't make laws. The guys making laws are generally really sharp and well educated, and in fact a lot of them actually have economics degrees because it is a great background for that position. So they probably understand better than you or I roughly how many jobs are going to be killed by these tight regulations.
That is weighed against the military's desire to keep space less open for security reasons. For a long time the military was winning the argument. It has slowly started changing, but the delay certainly has nothing to do with a mis-understanding of economics.