Almost every one of the original designs for the STS system (space shuttle) was to be designed and built in exactly this manner! However, at the time congress thought that the initial costs would be too high, and so forced NASA back to the drawing board where thay came up with the current stage-and-a-half type of vehicle.<br /><br />I personally, have always thought that this more complete two stage totally reuseable liquid engined fly back booster type of concept was what the shuttle should have been! With the experience gained on the current system, and more modern abilities such as composite construction this type of system could very well be even cheaper to develop, and it would absolutely be much cheaper to operate than the current shuttle system! <br /><br />Also, NASA wanted the original shuttle orbiter to be far smaller than the eventual design. But to obtain the considerable political clout of the military, they had to make the orbiter far larger than it should have been. <br /><br />If you were to take the booster in this concept and make it large enough to carry a smaller orbiter that could return from space and then land, you would have a true space shuttle. A true TSTO space shuttle! <br /><br />One thing that would be most important to making such a TSTO vehicle far less expensive to operate would be to develope a far less delicate TPS system! With a rapid turn around time and an orbiter that had its own internal propellent supply (instead of that very large payload bay and cumbersome external tank) you could have a future taxi to LEO capable of carrying up to ten people into LEO for only about $100 million per flight (a small fraction of the shuttles current launch costs, even when it was flying some 6-8 times per year). If the flight rate were high enough the costs could even come down more!<br /><br />Maybe, with the far more robust funding of the military this could even be done, and eventually turned over to the pure private interests for such use