Much cheaper to go the suborbital flight route. Anywhere on earth to anywhere on earth in 2 hours.
Less infrastructure required. (And today anything requiring massive governmental infrastructure commitments is doomed to fail)
Cheaper? You have much greater energy losses from atmospheric drag, firing hot gas out of your back end is far less efficient method of acceleration than electromagnetic propulsion, and you can use regenerative braking.
In theory setting this up should be much cheaper than high volumes of suborbital flights.
http://en.wikipedia.org/wiki/Point-to-point_sub-orbital_spac...