Think of the shuttles as 30 year old Italian sports cars, they are still neat and they still work but as their mileage builds up they become increasingly expensive to maintain and at some point it ceases to become worth it because the performance is not that remarkable any more. Additionally, there are some core safety issues with ice and insulating foam impacting the orbiters that, despite NASA's best efforts, have simply not been overcome (as we've seen with the latest damage to Atlantis). They've been fortunate since the Columbia accident that more serious impacts have not occurred, because trying to fix damaged tiles in orbit would be extremely difficult. Continuing the same program is asking for another such disaster to occur, it's only a matter of when.
And they call them orbiters because that's the extent of their capabilities as designed. It makes very little sense to spend such large amounts of money on maintenance on your 30-year-old Italian sports car when you can get the same performance (albeit in a less sexy package) from a new Mitsubishi. The future of the space program depends on expanding our horizons, and with the shuttles we have hit a brick wall. Orbital space flight is much more efficiently handled by traditionally stacked rockets, and at much lower cost with the private sector becoming more involved.
NASA's value to the American people in the future will not be defined by putting more things in orbit. It becomes a non-story. Think of the days of the Apollo program when Americans were glued to their TV or radio and watching or listening history being made. Fast forward to today, and even an impressive Hubble repair mission barely gets press. These missions no longer capture the imagination of the country, they MUST get back to doing that, and truly pushing the boundaries of what we know in order to re-capture that attention. Like it or not, NASA's future will be directly tied to what new and impressive things they can discover, and what technologies they develop along the way. If they commit all their resources to maintaining the shuttle program that will never get us beyond orbit, it's a slow downward spiral, and one that will eventually result in another shuttle being lost, and funding being decreased.
Designing a new fully reusable launch vehicle will take many years if it is going to be designed to do MORE than the current shuttles, which is the only reason to make one. Or alternatively, I could see a space-plane type design that utilizes scramjets to get to high speed and high altitude prior to switching over to rockets to boost it the rest of the way to orbit. This would eliminate that debris-impact-upon-launch issues of the current shuttles while preserving many of the cargo capacity benefits of the shuttle. But this would be a long-term process that may even be better handled by the Air Force. For NASA, their goal must be new exploration and discovery, and increasingly leave the routine cargo-to-orbit stuff to the private sector or military.