The reason to go to Low Earth Orbit is that that is the place where space begins, and that is the place where we should transfer to space vehicles designed to travel exclusively in an airless environment. The current shuttle is a all-purpose vehicle, designed to reach altitudes of hundreds of miles, while carrying large payloads. We have to get away from that concept if we are going to lower the cost of putting people into space. And it is those costs which are the greatest impediment to progress off-planet right now.
I think we need just those capabilities to get from the surface to LEO and back. Beyond that we should look to vehicles brought up by a Shuttle clone and assembled in LEO. Getting to LEO and back to Earth are the two things we have to do to operate in Space. Once there it can be a simple matter of assembling vehicles from various components brought up to Leo.