NASA had forty years of research time trying to make launches faster and cheaper without compromising safety. They failed miserably.
The failure is by no means the fault of the engineers, designers, mechanics, or researchers. The fault lies in the fact that NASA is a government agency and as such it is hogtied and hamstrung by the rules the government laid down to regulate their operations.
As far as privatizing the Shuttle goes, any company which bought a shuttle would have spent WAY more than it would be worth just updating the onboard systems. Better to start from scratch and design in state-of-the-art systems, preferably with a good deal of thought as to how to make it easy to upgrade later on.