A smaller spacecraft that was only tasked for transporting people and not cargo would mean a lot less complexity throughout. A smaller spacecraft would mean smaller rockets, and it would mean fewer tiles. We don't fly airliners that carry maybe a dozen pasengers plus several tons of FedEx parcels -- why should we think that what doesn't make sense for routine terrestrial air transport should make sense for what is supposed to become routine space transport?
And what is the engineering and production plan to deal with a loss rate of 1:50 flights?
The mission concepts of STS presumed a loss rate of 1:100,000 flights, not 1:50. There are no plans to produce a new orbiter every fifty flights-there are no plans to produce orbiters at all.
And there is no engineering program for a replacement.
Fly 'em until they're all gone, then leave space to the Chinese.
Is that really the plan?