The biggest single problem is escaping Earth’s gravity at reasonable cost. To get to low Earth orbit you need to travel at 28,600 kms/hour, and 50% faster to escape the Earth’s gravity completely. So far we have used rockets, which means that virtually all the energy at lift off is for transporting the fuel and its casings/engines – and then it’s thrown away after a single use. Space X have managed to recover a first stage rocket, and reckon it can be reused up to 10 times. That does bring down the cost, but even with complete first and second stage reuse it will still be high.
There is another major objection to rockets, for transporting more than a few astronauts. They are dangerous - there is an average 2% failure rate for launches, with a strong likelihood that all human passengers would be killed. That is an unacceptable level of risk for mass transport. By comparison, even in days of piston engines (more unreliable than jets) civil aviation accidents did not exceed 0.04% of flights: Perfecting rockets is like perfecting sailing ships or the steam locomotive. The Skylon concept uses air breathing ramjets for part of the way, and will be (if built and if it works) a true space plane rather than a multistage rocket. The key part is a new design of ramjet engine:
The engine’s secret is its heat-exchanger technology that can can cool air entering it from 1,000°C to minus 150°C in just one hundredth of a second whilst preventing ice from forming within the unit. This allows the engine to switch in flight from air-breathing mode at Mach 5.5—twice as fast as a jet—to that of a rocket engine, reaching Mach 25, or 7.5 km per second.
Even this proposed vehicle has propellant for 80% of its weight, and the payload is only 5% of the vehicle weight – and that is only to low earth orbit. Moreover Skylon (image below) would cost over $1 billion to develop – as much as a major airliner, but without the volume of sales to recoup the cost. Source: http://www.bbc.co.uk/news/science-environment-27591432
Space Habitats Revisited