...which is sort of stupid, given that there are multiple private firms eager to deliver this service, and deliver it at a price point lower than NASA is remotely capable of achieving.
This silliness is explained by the fact that NASA employees want to work on this project, even if it's going to cost more and deliver less than other teams working on it.
As with regulatory capture http://en.wikipedia.org/wiki/Regulatory_capture and the principal agent problem http://en.wikipedia.org/wiki/Principle_agent_problem, the key insight here is that NASA is not run for the benefit of the people who cut the checks (the taxpayers) but for the people on the NASA payroll.
A wasteful rocket development program is not a COST ... it's a BENEFIT.