When I took Ae105 at Caltech, the NASA MSL project manager explained it like this (I remember the numbers he used clearly): a mission might cost $500 million with an 80% chance of success, or they can spend twice as much to increase the chance of success to 95% by investing a lot more in upfront testing and R&D. Now, the smart thing to do - given a billion dollar budget - is to take that first option because if it fails you can try again and the probability of both attempts failing is only 4%, compared to 5% for the expensive single mission. Then you’ve got an 80% chance of having $500 million left over for a different mission.
The public and decision makers react irrationally to any failure, putting funding for other missions and the entire program in jeopardy. NASA and ESA have to make some extremely suboptimal decisions to make sure that funding doesn’t get catastrophically cut.
The above is the example the instructor used to easily illustrate his point but he said the real numbers are even more stark. Often times the cost savings of just building a second copy of the payload along with the first means it costs $600 million for the first attempt, and only $200 million for the second (the cost of the launch vehicle and keeping people on staff), saving hundreds of millions overall.
Which, incidentally, is one of the key reasons SpaceX has had the success they have: they're set up to handle failure and avoid this politics. How many Starships have blown up? If Starship were a NASA program, how many explosions ago would it have been cancelled? And yet this approach to risk is pretty effective!
Compare the responses to a failure by Boeing or SLS and to a failure by SpaceX.
Also, SpaceX hasn't had a serious non-experimental failure yet (?). I'm sure their PR is preparing for that eventuality, but when non-fans are upset over a bad outcome and then learn about the risk tolerated, they will swing from admiring risk to condemning it. Imagine the Congressional committees.
Even if SpaceX is super-conservative when flying humans (which we shouldn't assume - cultures tend to be consistent), if someone dies then all that risk-seeking behavior will be attacked.
(To be clear, as long as SpaceX can manage risk in production - i.e., with high-value payloads such as people and NASA flagships - I think they and everyone else should use risk efficiently.)