I agree that they were well funded. But the designs were complete genius. They were exceptionally clever with the use of rudimentary technologies they had at the time. One of my favorites is how they used an Archimedes spiral in celestial attitude determination. It isn't too farfetched to say that they used scraps to build the program - they just MacGyvered through every challenge they faced.

> What changed that made this a plausible way to proceed? Some fundamental breakthrough or just Musk's deep pockets?

I don't think anything changed fundamentally. Honestly, the design methodology for any engineering project would evolve organically to be similar to NASA's methodology as its complexity grows. Despite how it looks, Falcon 9 is actually a very conservative design that doesn't depart much from this philosophy. They did everything possible to keep the complexity low and reliability high. Merlin is a simple open cycle engine utilizing pintle injectors. The propellant combination was well known. The vehicle materials and structures were similar to traditional designs. Pneumatic systems were favored in place of pyro systems to improve reusability. Even the vertical landing technology (VTOL) was demonstrated in the 1990s (although Falcon is the first one to land vertically after reentry). The designers were industry veterans utilizing NASA's help. And they took a long time to perfect the basic technologies and had already nailed the basic platform design by the time they started experimenting rapidly with high production rates and landing. Switching to agile mode wasn't a big problem at that stage.

Starship on the other hand, was very unconventional from the word go. Stainless steel structures, methane as fuel, full-flow staged combustion cycle engines with near-limit chamber pressures, cartwheel separation maneuver (which they ultimately abandoned in favor of hot staging, with a lot of ongoing issues), use of sea-level engines in space (on the second stage), the belly-down reentry and the final belly-flop maneuver by the starship, etc. There are more than a dozen things in there that nobody has tried before. It just seems like they have too many things on their plate. Musk's deep pockets did play a big role here. But I'm going to avoid speculating on it.

They're referring to the dialogue by Obadiah Stane in Iron man. But it's also appropriate in some sense if you consider how they made the carbon dioxide scrubber in-flight in Apollo 13.

Is the FAA going to wait around till it does the same in flight?

I'm not so sure. The biggest explosion I saw in the video was right at the base. I think that the liquid methane spilled and fell to the ground. Probably the oxygen tank also burst by that time, spilling LOX right into the path of the falling liquid methane - creating a nice mixture of methane and oxygen right at the base, ready to explode.