From what I've read, Elon has said the climate there is bad for corrosion. However -- you'll get that at any sea-side launch side... which basically means for anything other than a polar launch site, you'll have it. He's had to build his own facilities... but as costs are sunk in that and the infrastructure grows, incidental logistics costs will drop.<br /><br />As for it being military -- you'll have a hard time finding something that's seaside, U.S. territory, not already either heavily populated or massively expensive, *and* not owned by the military. As for B.S. -- the military wants their low-cost responsive launcher. They're liable to provide some grease to the wheels of their normal processes.<br /><br />In any event -- logistics costs are unlikely to kill an operation of this sort. Litigous costs, on the other hand, could kill one in a heartbeat. I can't see a better option than this to minimize risks of this sort.