I think that technologies naturally reach their limits and until something radically new comes along pouring more and more public funds into it will yield diminishing returns. The trouble is that the space industry is hard locked into a mode from the 1960s where it was supposed to be used to advertise ICBMs. If I were to point to a more useful direction I suspect that rocketoons and aircraft first stages might make them more efficient. Copenhagen suborbitals is also very inspiring.