The only problem is, NASA--being a government agency and all, which has identified space exploration as its bailiwick--is a jealous god and won't tolerate any "horning in" on its territory. While the agency doesn't have the power to actively prevent private citizens (or corporations) from making space flights, it does have the power to wrap such flights in endless webs of red tape, and a call from the right NASA employee to the right FAA employee can stop such operations dead faster than you can say "restraining order".
All the NASA bureaucrat would have to say is something like, "NASA has serious reservations about the safety of the Virgin Galactic spacecraft." and the FAA could then say, "Okay, Branson: Virgin Galactic doesn't send anyone into orbit until we're satisfied it's safe. And since the only government experts on spacecraft work for NASA, we're going to have NASA people head the inquest."
I know that many people regard my opinions about NASA as overly paranoid, but I can't help it. I used to be a staunch full-on supporter of NASA, until I really learned about how the agency did things in the wake of the cutbacks to the space program in the 1970s.
It all started when I did a research paper in college about NASA's quest to build a replacement for the Space Shuttle, the National Aero-Space Plane (NASP). (The ultimate expression of NASP was--before it was cancelled--the X-33 project, which I talked about in this entry.) My research told me things about the Space Shuttle which were never mentioned in all the fluff pieces in the papers; at the time no one ever talked about how delicate the thermal tiles were, or the main engines--
The main engines! Reading Richard Feynman's autobiographies was enough to convince me that the Space Shuttle Main Engines (SSMEs) should never have been man-rated. The damn things run for--what, ten minutes? fifteen?--per flight and then must be completely overhauled. As a jobs program for aerospace engineers, the SSMEs are wonderful...but as tools for exploring space, they're utter junk. (And for the nit pickers, any time you must completely disassemble something and inspect it--even if your inspection reveals that no replacement parts are required--that counts as an "overhaul".)
Reading Larry Niven and Jerry Pournelle--especially Jerry Pournelle!--further damaged my opinion of NASA's competency. It was Pournelle who pointed out that NASA took a perfectly usable Saturn V and made it into a goddamned lawn ornament:
This is my own photograph, taken when I was 9 years old and visiting Cape Kennedy, in 1976. At the time I was ignorant of what this meant, what it represented. What a goddamned waste.
On-orbit payload of the Saturn V is 100 tons. On-orbit payload of the Shuttle is 20 tons. Only a government agency could convince itself that reducing per-flight payload while increasing cost-per-flight will result in cheaper access to space.
The fundamental principle of space flight is pretty simple: gross lift-off weight (GLOW) equals booster plus fuel plus payload. Generally speaking you wish to maximize your payload; but the load won't move without a booster, and the booster won't boost without fuel. With chemical rockets, fuel ends up being the majority of GLOW.
Sitting on the launch pad, the Space Shuttle weighs about as much as an Apollo mission (ie a fully-loaded Saturn V, destination Moon) but too much of it is spacecraft and fuel. Even its purported status as a "pickup truck" is misguided; the largest sections of the equally useless space station had to be boosted to orbit by the Russians, who (at least) haven't forgotten basic economics and still build heavy-lift boosters. They may be an old design, but they can heave massive hunks of stuff into orbit and they work.
Think about this: let's say you own a large factory which makes washing machines. How do you ship your merchandise to retailers? Do you send it in loads that will fit in a pickup truck, or do you ship it by the carload? ("Carload" means railroad car, by the way.) Which shipping method will cost more, in aggregate and per unit? Hint: you do not see many pickup trucks sitting at the loading docks at the Maytag factory.
If someone else gets into the business of putting people and stuff into orbit, NASA is going to have a problem convincing congresscritters to fund it. Although I think the best thing NASA could do for manned space flight is simply to get the hell out of the way I know the agency won't do that. Give up bailiwick? Any bureaucrat who suggests that will find himself in a mental asylum, thrown there by his peers, and forgotten.
There's plenty of room in outer space, but in the US, NASA is the gatekeeper. That's why, in Joss Whedon's Firefly, people speak Chinese.