It was the X Prize and Scaled Composits that broke the logjam with their "we can launch from anywhere with a runway" system, which combined with the failure of the shuttle system and lack of funding for NASA has forced them out of a stranglehold position to the point where they basically funded much of SpaceX's early work.
But don't under estimate the effect of the X Prize-- because Virgin Galactic can launch from anywhere, NASA and the politicians had to decide if they were going to lose access to the space tourism business.
They still were kinda silly-- at one point Richard Branson who funded Virgin Galactic was blocked from seeing the designs for the Virgin Galactic ship due to the fact that he is a "foreign national" and the work was considered a "national security" issue.