Putting a starship in low earth orbit right now would be a bit reckless, because if the engines fail to relight it's going to come down at some point in a completely random spot along the trajectory, and it's quite a large piece of debris that is designed to not burn up. By contrast this test (which involved the first 0g relight of a raptor) was designed so that if that failed the ship would still come down in a designated keep out zone in the ocean.
Even ignoring the safety risk, the value SpaceX gets from this flight is largely testing the re-entry (heatshield, flaps, etc) of starship. Putting it in an orbital trajectory risks a failed engine relight making it impossible to test that, because the ship will be dead (out of power) by the time it comes back down. Whatever low-cost payload you could put up there for "free" (the cost of risking the payload being destroyed if the test flight goes wrong too early) might not be sufficient to pay for the risk stopping in an orbital trajectory imposes on the test objectives.
Now that they've successfully lit a raptor in 0g, I imagine they're a fair bit more likely to make the subsequent flights orbital.
All it really does is remove the explosive potential of the fuel.
So no, it's not designed to do this.
Once in orbit the FTS system is usually deactivated (safed).
While the reality is very complicated, you can make a rough handwave model for orbital debris in a circular orbit: At 100km it lasts 1 orbit (90 minutes) at most, and every ~100km you add after that increases orbital lifespan by ~10x.
More relevantly—it's harder to make a marketing stunt out of a fallible mission.
And don't say launch services, 'cause you're using "it's a marketing stunt" to explain why they aren't taking payloads. "It's R&D" makes a heck of a lot more sense.
SpaceX is well known for making a marketing stunt out of their failures (see "How Not to Land an Orbital Rocket Booster"). In fact, Elon Musk is known to make marketing stunts out of anything.
But that's not it, they could have launched a dummy payload if they wanted to, they have already done it for other rockets, and yeah, they made it a marketing stunt. Famously, they launched Elon Musk's Tesla Roadster in the direction of Mars. But here, launching a payload at this stage of development is just not the best thing to do.
The flights could deliver cheap payload for example.
The license for Falcon 9 and Falcon Heavy specifically says “Authorization: SpaceX is authorized to conduct flights of launch vehicles: […] (c) Transporting Dragon 2 to low Earth orbit or a payload to orbit;”
The license for Starship/Super Heavy Launch Vehicle does not include such an authorization.
Because they couldn't guarantee precise deorbiting, they never put it in orbit to begin with. Starship was on a ballistic trajectory that falls back to Earth. Any payloads they deployed would fall back too, unless they carried their own rockets to reach orbit themselves.
Actually Starship on this flight wasn't quite on a ballistic trajectory, the periapsis was actually above the ground so it counts as an orbital trajectory. Without the atmosphere it would keep going.
I don't expect this to be a major showstopper but obviously they must figure it out before they can start making money off of starship.
If they dont catch the starship (upper stage), the whole project is pointless so its important keep things simple (details like payload door, cargo dont matter) until they achieved the whole loop (land & catch starship)
They already have a cheap way of launching. Cheap for current market rate. Whole point of this project is to improve cost by / 1000.
They achieved substantial progress with every flight. 1. It flies, 2. hot staging 3. reach orbit 4. land both & heat shield, 5. catch booster, 6. extreme conditions & improve heat shield.
The reason was safety. If it was orbital, then controlling the re-entry would require a sucessful relight of the engines. If that failed then the re-entry point would depend upon the vagaries of orbital decay from residual atmospheric drag. That's no doubt why today's relight was so brief; they didn't want to significantly alter the reentry point.
This means you don't have to do anything to deorbit while proving you could have made a full orbit if you wanted to.
Orbital means "on a trajectory that doesn't intersect (or escape from) the body you are orbiting", otherwise the word is meaningless.
(Wouldn't they?)
Which is what we call "sub-orbital" :)
Well, except for relativity turning it into a black hole with a Schwarzschild radius of 8.87 mm so it won't be "point-like".
But most of the disintegrate sheen of plasma that used to be your body would have had some horizontal motion compared to it, even if only due to you starting off as an extended body.
But would you say you hit neutrinos that pass through you without interaction?
If pointlike was possible, it can be similar: nothing beyond the spaghetification that happens well before you reach the event horizon.
And that's sub-orbital. Barely
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The reason for choosing not to go orbital at this point is indeed as another commenter said: safety. A craft which has not reached orbital velocity is therefore traveling on a parabola, which has a predictable flight path. If they lose control of all systems, they can still be confident that it will crash where they want it to (in this case, the Indian Ocean). If instead you boost enough to get orbital and then lose control, it is much harder (almost impossible) to know where the craft will end up.
SpaceX (and the FAA) wants to make sure everything works properly by doing sub-orbital flights, then when they are fairly confident nothing will completely break on them they can start testing in an orbital regime, by powering on Starship's engines long enough to achieve the requisite speed.
they pushed the rocket to the limits in this flight