Hydrogen is a pain in the ass to work with if you want a reusable rocket. The Space Shuttle was really only nominally reusable, the engines had to practically be rebuilt every time to make sure everything was alright (the SRBs were hardly any better, though at least they were simpler.) (Really, hydrogen is just a pain in the ass in general though. It isn't very dense and needs to be kept much cooler than LOX to boot (requiring all that foam on the external tanks), which is why the Shuttle external tank had to be so goddamn big. The massive efficiency of LOX/LH2 are somewhat mitigated by these factors.)
If SpaceX can get their F9R working well, that will likely be the first properly reusable rocket (first stage anyway). Those will burn RP-1 which won't suffer from hydrogen embrittlement.
The Soviets would have been better off continuing to neglect LH2/LOX and focus on the fuels they did best with (basically what they have done ever since they discontinued Energia). Also, while the Energia would have been suboptimal for non-Buran loads, it still would have been the heaviest lifting rocket they ever had, able to put 32,000kg into TLI (compared to the Saturn V's 47,000kg and the N1's never realized 23,500 kg). The Shuttle stack wasn't merely suboptimal for that sort of thing, it was worthless.