Had they received the same grant money as Boeing ($4.2b vs $2.6b), it wouldn't have been such a close call.
I'd also note that they were also late by 3 years or so: this did not produce miracles, it was just much cheaper and better in the end than what Boeing is still trying to do.
Still, I would be surprised if SpaceX did not greatly benefit from knowledge gained in Falcon 1 development when building their Falcon 9 rocket and then optimizing it for reusability — they started development of Falcon 9 while Falcon 1 was still operating.
This illustrates beautifully how stupid labeling ideas stupid is.
To know that that an idea or approach is fundamentally stupid and unsalvageable requires a grasp of the world that humans may simply not have access to. It seems unthinkably rare to me.
Had that one also been a failure, he wouldn't be running the US government and we'd all be talking about how obviously stupid reusable rockets were.