I see this as partially being that Musk is effectively filling his own volume demands for SpaceX. So even if this venture breaks even, or loses a modest amount of money, ramping up the launch volume for SpaceX is a big win for him. Every launch he can have with SpaceX that pays for itself, is a big win. It might also help demonstrate the economics that he has always had in mind for space, over time; an evolving proof of concept (that it'll likely get cheaper over time).