Tricky Woo hits the mark with his remarks about what the shuttle is not: (reusable, routine, safe, casual, or a free-roaming space ship).
The reason for most of that is practicality - it is actually still rather difficult - given our grasp of the technology and the 1960's tools in use - to launch things into space so they can return gently on demand. A lot harder than ICBM's. Some days it is impossible.
Kennedy's plan to reach the moon in the 60's was a brilliant amalgam of political, military, economic, & private goals sold to the ever-optimistic American public with plenty of flag-waving and Hollywood-style manipulation. It worked just fine for most of the near-term purposes, but the larger consequence is that NASA has had to mix in equal parts of myth and performance ever since in return for its annual billions. And it has had to rain money every year on politically well-positioned states for contracts, facilities, "Labs", and "Space Centers", especially ones in the Bush family franchise zone, including Florida and Texas, established courtesy of Kennedy's VP and successor from Texas, LBJ.
The NASA-inspired barrage of press materials, calculated leaks, fanstatic new scientific discoveries and environmental problems soluble only through spaceflight tends to closely follow the annual progress of U.S. Federal budget negotiations in Washington. If the funding calculations bog down without enough zeros in the right places for NASA and the numerous off-the books projects that feed into it and draw out of it, then reserve
PR troops come in with fresh slants on Global Warming and recently discovered (or not yet discovered) asteroids that may hit the earth at any moment to wipe out all forms of life. Holywood flicks reinforcing the thought are quickly released. For many Washington-watchers, the NASA budget cycle has replaced a certain circus as "The greatest Show on Earth."
One can note with respectful awe how the current cock-up was converted within a matter of hours into a very organized campaign by NASA spokespeople and hangers-on to plead "underfunding" as the root cause and thus negotiate larger budgets for more of the same.
The real problem that plagues NASA the most is not underfunding, but arteriosclerosis. Too many NASA people have the "job for life" mentality that Government employment fosters, so they make choices to ensure continuation of programs which preserve their pension plans, rather than allowing more efficient uses of the available resources. In cases recently coming to light, some practices more resemble corruption than bureaucracy.
All that said, NASA as an institution has done a difficult job quite skillfully under an uncomfortable degree of public scrutiny.
But, at times like this, the organization tends to regress under the protective cover of institutional myths inherited from the 60's, distracting many from the underlying problems by focussing attention on a sea of marginally-relevant details.