"It is long past time that NASA was disbanded. Far from ending US involvement in space, such an act would increase the American presence in space. All those engineers and technicians wouldn't simply disappear. They would receive severance packages, and team up with each other, forming hundreds if not thousands of new space companies, each competing on a level playing field with the hundred or so new space companies that have sprung up over the last ten years. The competent ones would succeed. NASA could divest itself of probably 90% of its workforce (a large proportion of whom are simply deadweight bureaucrats anyhow). The remaining 10% would operate sort of like the FAA does, as an Administration (note the second A in NASA's name - that's what they are supposed to be in the first place). This is the only way to successfully implement the Vision for Space Exploration - the existing plan to do everything the same as before but expecting different results will be a spectacular failure, wasting hundreds of billions of dollars, and most likely accomplishing nothing.
Disbanding NASA is one thing I'm sure Ed would agree is way long off from ever being realised. But his line of thinking is similar to what I've been thinking lately. A full disbanding of NASA isn't possible overnight, but could be done by implementing an ousourcing policy at NASA.
Other corporations do this quite successfully. Toyota for one. NASA could better realise most of its goals by outsourcing most of what it does to private companies. They could do the administration and no more.
It could start slowly at first. Try contracting out a few NASA launches to private companies. They could move to give contracts for range management, and a host of other management issues... Slowly but surely the scenario Ed describes could become a reality over time.
And who says those in the know aren't already trying to do what we've described?