What constellation needed to do was lower the cost of spaceflight such that NASA could afford 6-8 flights of it to LEO. NASA could then support LEO missions with some of those flights and trade some of them for BEO sorties or something else. The ISS or other station in LEO might need 4 flights a year, not 8 going to the same destination. If the craft is capable of BEO but cheaper than the shuttle in LEO then NASA could use the funds from the extra flights to buy missions BEO.
Instead it raised the cost of spaceflight to the point where NASA could not afford it at all. It locked future administrations into a moon program that they may or may not have supported and it did not deliver a product anywhere near on time. The shuttle did not lock furture adminstrations in quite as badly. Small steps are just important a big ones and perhaps more so.
Except the current approach is doing no better. No matter how you build an expendable rocket, prices will remain tied to the costs of fuel and structural materials. Maybe an SSTO would reduce costs to a thousand dollar per kilogram to LEO, but Obama's approach isn't building that either. And your baby-steps approach has been tried since 1980, in the form of the Space Shuttle. That program has achieved no significant technological breakthrough's in thirty years, as opposed to the Apollo program, which brought the USA from ICBMs to heavy-lift rockets. During the Apollo Program, NASA developed nuclear reactors in space, life support systems, space suits, and other technologies important to the expansion of humanity into space. No similar developments have taken place during the Shuttle-ISS era, except perhaps the urine recycler aboard Station. If we actually develop a plan to go somewhere, for example the moon, provided we have political will, we will develop the technologies necessary to sustain a base on the moon. If we choose to go to Mars, we will develop the technologies necessary to live on Mars. If we continue to float around LEO, we learn nothing.
We've already learned how to sustain humans in earth orbit.
Actually accounting for inflation the price to orbit has decreased from the 1960ies to today. It still isn't cheap to get to LEO but it is cheaper. The shuttle failed to reduce the price, but the choice at the time was between a reusable space plane and nothing(Production of the Saturn V ceased when the government did not order a second round of rockets in 1968.).
Anyway as with anything the big cost isn't materials(your car only has about $2000 worth of materials in it). It is in man power and in facilities. Reduce the need for those and you have made progress no matter if it is reusable or disposable. The shuttle's flaw perhaps is that it was flown too long. A space shuttle built today would require less man power to refurbish. It still might not be cheaper than disposables but it would be cheaper than the late 70ies technology of the shuttle.
Ok just to keep things simple, I will limit it to ISS life support vs. Shuttle/Skylab/Apollo life support. The famed urine recycler is part of a water recycling system that can reduce the water needs of the crew by up to 85%.
Shuttle and Apollo life support are great for sorties while Skylab used the might of the Saturn V to solve it's life support problems.Skylab carried all the supplies needed to support nine men for 140 days. In fact when it was lost it only had about 20 days worth of supply remaining and that was due to careful rationing of the previous crews. Skylab was not designed to be resupplied.
If all you need to do is spend about two weeks in space and you need to return back home in the same craft Shuttle Apollo systems are probably better. However if your trip is going to go on for months ISS is better.
The first killer is CO2. This is what will kill if trapped without fresh air. Apollo, Skylab and Shuttle use disposable lithium cartridges. The trouble is your spaceflight is limited by the number of cartridges. Shuttle and Apollo just carry enough for their missions. Hence the Apollo 13 problem of not having enough Cartridges in the Lunar module for the trip back to earth and needing to find a way to fit the CM ones. The ISS has a regenerative CO2 scrubber. It needs no cartridges. It just vents the CO2 out into space.
The second problem Oxygen. Shuttle and Apollo use fuel cells, since the fuel cells need oxygen anyway you can use that for the crew. However fuel cells are an inappropriate way to power any long duration mission. Fuel cells require oxygen and a source of hydrogen. The shuttle would run out of power if left in orbit too long.
The primary oxygen generating system on the ISS uses water. Oxygen canisters are heavy and pose a danger to the crew(i.e. it can explode due to pressure). The ISS has some but only as a back up. The ISS systems break water down in to hydrogen and oxygen and vents the hydrogen. Another handy thing about using water is that the shuttle's fuel cells can supply the ISS with water when it visits.
Right now discovery is carrying equipment that will react the CO2 with the Hydrogen to produce water and methane. This will reduce the need of the ISS for oxygen since water used for both drink and breathing.
The ISS(and the research needed to get it) has reduced the NASA's need for life support and given experience of operating said systems in the safety of LEO.(i.e. I would trust a system in space more than a system in a lab). Future missions will require much less water and Oxygen to be sent nor will be limited by the number of C02 scrubbing cartridges. This reduces the amount of mass that needs to be sent to a moon base or mars or future stations.
In addition the ISS is studying the radiation problem. How much radiation and of what type.
Using this technology an moon mission today could leave behind an extended duration module in L1 or LLO and stay at the moon much longer than Apollo with out needing to carry as much mass.I would say that that much alone makes the ISS worth it. Not counting all the other research that goes on at the station and experience with working with international partners.
--Correction Nasas Develped the CO2 scruber as an upgrade to the shuttle to allowit to stay in orbit long enough to build space station freedoom.