Note that the crew of the Challenger wasn't killed by the "explosion", they were killed when the vehicle compartment they were in hit the water.
If the shuttle had an escape mechanism the way every other manned space vehicle had, they might have survived. Had they built in an escape mechanism, there wouldn't have been any room for cargo. From a safety perspective launching cargo + passengers on the same rocket was a mistake.
Also the shuttle was designed to do a military mission that it never actually did, which would be launching, orbiting the Earth once, and then landing at an airstrip close to the launch point. That requires a large "cross-range" (ability to turn when reentering the atmosphere) which in turn requires larger wings which are more vulnerable to something like what happened to Colombia.