What these systems do is push mission success from somewhere around 80% (now I'm low-balling, it would likely be a slightly higher success rate*) to >99%

Right, the Pareto Principle. But is 80% good enough? If a rocket costs 100 gigadollars to construct, and 20% of launches fail, then your rocket really costs 120 gigadollars. That's a pretty big difference. Is the work to get it up to 99% really costing 20 gigadollars?

If your craft is reusable, it's even worse. Because then you spent all that money on a craft that's only good for 5 launches, on average. What about manned craft? If the average rocket has a crew of 5, you now have a death toll of one human per launch.

I agree NASA needs more efficiency and less bureaucracy. But I don't think sacrificing reliability is going to save costs.

a commercial entity has no incentive to fund science for the sake of science. When there's no reason (no conceivable product or service that will result from the science)

Marketable products will always result from science. NASA and Bell Labs are the best examples of this. Most private companies are just too short-sighted to realize it.