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Nationalize it and roll it into NASA
NASA hasn't done much because they set a specific agenda to try to push "routine" space operations into the private sector, not because they aren't able to.
It's not like the companies that do this sprang up and started doing without assurances they would have business.
Saying that NASA hasn't developed new rocket technology is just absurd. They haven't built as many low Earth orbit launch vehicles. There's a difference.
US tank command also hasn't built many jeeps.
I'm not sure why you saying it's based on the Saturn 5 like that's a bad thing. Modernizing a successful design isn't a bad thing if you're doing a similar thing.
https://www.nasa.gov/centers-and-facilities/marshall/nasa-validates-revolutionary-propulsion-design-for-deep-space-missions/
Literally basic research into differing mechanisms for rocket propulsion. What do you think they do? That took literally 10 seconds to find.
So, you see "old technology" as bad, while people who actually do the work see it as "tested". What, exactly, do you think they need to change? Do you think they haven't modernized the components? If you actually read about it, at all, you can read their considerations on reusability, upfront cost, refit cost, and usage cadence.
Basically, it's more resource and cost effective to not reuse it.
I'm not entirely sure what you're saying with your four attempt thing. Do you think they developed their plans for a commercially viable orbital launch vehicle totally blind of NASA's plans for commercialization of low Earth orbit? NASA was already doing commercial contracting when SpaceX started.
And you're forgetting that their first launches were purchased by darpa.
Your last point just sounds like you're agreeing with me. NASA has been doing deep space rocket development, and leaving routine work to companies. I'm not sure why that's so disagreeable, considering it's what they said they were doing, and are very clearly doing.
Every bit of Space X's business is built on the backs of NASA engineers. They are simply beneficiaries of radicalized privatization of public domains.