The Challenger and Columbia disasters exposed massive NASA management failures, a less than ideal transporation concept (crew "capsule" behind the rockets), but did not expose the Shuttle as a totally failed system. Current Shuttles are totally different from the first Columbia on ALL aspects, as their reliability, efficiency and cost/performance ratio have sky-rocketed (pun intended) by any standards. The only issue marring the STS is general fatigue which is a direct result of the loss of two Shuttle. Costs are much lower than ANY alternative today, and since Soyuz cargo capacity is not comparable to that of the Shuttle, comparing the two is irrelevant.
Well, the requirement for the OBSS, the backflip maneuver and STS-400, shows how "reliable" the Space Shuttle is and that today it is not different in "ALL" aspects. There was updates already after Challenger. But the Space Shuttle, its original design and technology, is basically still the same beside all the tiny changes here and there that combined are called lots of changes. Especially the External Tank continues to be a risk of what had caused the loss of Columbia...
The Shuttle is that much expensive because of various reasons. First of all it carries crew and payload at the same time. And there is that costly NASA infrastructure, plus the reusability causes massive costs as well (also for the SRBs). Even without carrying a huge paylaod or a payload at all, the Shuttle still causes massive costs for one launch just to carry 7-8 astronauts into space. Most Shuttle payloads beside Hubble (just 50% mass of what the Shuttle can carry) and ISS components, were quite low in relation to its capacity. But each time you launch a Shuttle, you have that massive launch costs in any case. Another fault for that, beside the STS concept itself, is NASAs structures which is big national job keeping programs. The costs for AresI and Orion for example would have been even higher than for the Space Shuttle, just to bring twice as much astronauts to the ISS as Soyuz does, and just for the sake to pass that design and make it fly. It doesn't work that way, which is why politicians are not willing anymore to pump billions of Dollars into such programs.
If we talk about payload capacity we should also have a look to the Russian Proton rocket (up to 22 tons). Another story of success, because it is one of the most successful rockets, and the latest versions one of the most economical rockets in the world. It launched more than 350 times for now, both commercially and for the government (and we remember it was used for ISS assembly as well).
Ultimately, we'll see what happens regardless of what we say here. We live in interesting times, and this is not necessarily a good thing 
As an optimist, I say that it is a rather good interesting times
I know you probably want to close the subject as what has been siad, has been said. However, I wonder why US/NASA and Russia haven't tried two options: the resurrection of Buran (1K destoryed, but 2K I believe is in storage) and the Kilper project. Kliper did look rather promising, especially it is resuable and appears to be a cheaper option and on similar running cost of a soyuz, just expensive to get it through development. If NASA/US throw a few bucks and development resources towards Russia as a joint project, maybe, just maybe, that could be the answer to the midterm problems.
I think that a joint project is one of the best solutions in many directions. It reduces costs and also contributes to a friendly political atmosphere, and most importantly enables things that would not be possible as a solo effort. Present example: ISS. The times of big national solo efforts are actually over. Politicians and tax payers don't want to bother with expensive shows like Apollo or Constellation while there is work to be done on earth, which is really understandable in some aspects.
The Russian and European cooperation works quite good, just like the international cooperation on ISS. And beside Kliper, I also like the "Euro-Soyuz" proposal:
http://www.russianspaceweb.com/soyuz_acts.htmlBut I don't think that a resurrection of Buran would be a realistical scenario. It certainly would cause colossal costs. Maybe as a joint project it would be worthy, but then we would have to abandon any manned plans beyond low earth orbit. If we want to fly to the Moon and Mars in future, we need a lot of efforts that are almost impossible to do as a solo effort, especially in case something like the Shuttle or Buran is still in use. I even claim that a reasonable Mars and even lunar program is not sustainable in the long term without cooperation. Apollo was not at all sustainable in the long term, just like Constellation wouldn't have been. Even the ISS program is still a colossal program if we talk about money, but basically because of the expensive Shuttles and its required infrastructure. I don't think that reusable spacecraft like the Shuttle or Buran are the future. Reusability in space has turned out to be expensive, rather than economical.
That being said, I will now safe my bandwith a little more
