Because their model isn't based strictly on government contracting. It is based on minimizing costs to build a self-sustaining, privately operated space program. Contractors give you the space shuttle: it doesn't matter how expensive it is if it's what was in the RFP.
It's the difference between the government contracting out the F22 versus going to Boeing to buy a 737. And that difference is what makes it exciting.
That doesn't strike me as making much sense, why would government contracting be something to rave about? Because it's government contracts in space?