The chaos monkey school of rocket development continues. They will be finding problems in this thing until the day it's taken out of service.
And what's the issue with government funds? If the government wants to put satellites in space, why wouldn't SpaceX get paid for it? It's a massive advantage for the US government/military to have SpaceX too.
If you are clearly not a rocket scientist and seemingly not really interested in the topic how do you know it 'will never work'. Literally based on what are you making this claim.
SpaceX is by far the most advanced rocket company in the world, its not even close. They 100% believe this vehicle can work.
They have presented this to NASA, and NASA selected it and in their evaluation gave it the highest technical readiness level. NASA is involved and is monitoring and nobody from NASA has come out and said that anything they do is impossible.
Also you don't seem to understand how government funding works for this vehicle. These are FIXED PRICE CONTRACTS BASED ON MILESTONES. SpaceX will receive NO MONEY unless they ACTUALLY COMPETE MILESTONES. So the idea that they just do theater to get more government money just doesn't make sense, its not how it works at all.
There is just no to way about it, arguable the two most experienced space organization on the planet believe this can work but somehow you know better?
Basically when bidding for contract, SpaceX was able to submit a whole list of milestones. Each milestone is associated with some amount of money. NASA and SpaceX together negotiate these milestones and the associated payments in the contract negotiation.
Since this is a contract for a moon lander, and not a rocket, the launch itself is only a small part of the money. So a successful launch to orbit is very mostly likely to be one of these milestones. Successful reentry is another potential candidate. So if successful it would result in some payment from NASA, but since we are talking about a moon lander, launch will not be the primary milestone.
We don't know the list of milestones, that secret between NASA and SpaceX. But things like doing orbital refueling, landing on the moon are likely the most important milestones.
Its pretty certain that if they don't reach orbit, they will not be able to clear any milestones and thus not receive any payment. Unless they have some milestone for things like stage separation, but that sound unlikely.
Is this similar to how they developed the Falcon 9 platform?
* It did suffer engine failures on flights 4, 83, and 108, but compensated flawlessly with the other 8 as designed. They also blew one up on the test stand (which would have been flight 29). Additionally the satellite on flight 47 was supposedly lost due to an issue with the payload adapter (not built by SpaceX), but pretty much all information about the launch is classified.
They're plan is to mass produce Starship and work towards operating them continuously like a 737 to space. Blowing up the first few generates great data for identifying problems and helps get that production line rolling.
The falcon 1 was much smaller than the falcon 9 (literally 1/9th the engines on the first stage), and they intended the very first falcon 1 launch to work. I'm not sure that those failures really support the claim that falcon 9 had a similar development model to starship where they are intentionally blowing up starships to develop starship (edit:) and they have already blown up more than 3 starship prototypes.
No two falcons were ever built exactly the same until Block 5 or so (and honestly, I'd be surprised if there weren't changes between rockets coming off the line now, but the changes are much smaller and more iterative, I would guess).
It's basically the software development process, just with hardware. Falcon 9 is a mature product at this point, so most of what's happening are maintenance changes.