"The payload penalty for full and fast reusability versus an expendable version is roughly 40 percent," Musk says. "[But] propellant cost is less than 0.4 percent of the total flight cost. Even taking into account the payload reduction for reusability, the improvement is therefore theoretically over a hundred times."
And the downrange distance 11 seconds before MECO and 14 seconds before staging on the CRS-3 launch was about 60km (about 40 miles), not "several hundred miles."
If you have more robust engines to support reuse, that could offset the offsets, right? You can use titanium instead of stainless steel even though it costs four times more because you're going to reuse the engine 30 times or more, and so you get a higher thrust-to-weight ratio.
I addressed Propellant to cite mass and volume, not its cost.
How many miles does it travel in those last 14 seconds?
How is it going to retrace that path?
Using your Musk provided numbers, he wouldn’t grow the vehicle, rather reduce the throw weight. So, 5,000 lbs becomes 3,000 lbs.
I contend the folks writing the Range Safety rules knock that down to 2,500 lbs. max. (50% penalty rather than 40%)
Include Facilities, equipment, test, and labor for refurb....
Just color me skeptical.