Or maybe having been working on rockets for decades they have good insights about what is valuable or not. And reusable stages still has to prove to be worth it and not just a gimmick. As you like to say, market will solve it all.
It's pretty clear that from first principles, reusable rockets are a win[0]. The question of actualizing those principles can only be assessed by actually doing it, and is likely to be highly empirical. Unless there have been secret launches we don't know about, the ESA cannot possibly have good insight about whether or not it's valuable.
[0] then why haven't they done it yet? As a constrained market, none of the contractors who normally build rockets have had to yet. Moreover, I presume a lot of the computational engineering would not have been so easy 10-20 years ago, much less in a large contracting company with established folkways.
Musk is a gambler, and this time he won, but other times he has failed. The reason he can gamble is because SpaceX is funded by private money.
Markets will only solve it if government does not stop it. If Ariane had to compete on the commercial market only they could already not compete. If Ariane 6 had to actually earn its own development cost they could not even build it.
I was going to drive my car to work tomorrow, but now I’m thinking of setting it on fire and buying a new one. You know, to save money.