Malone, you may want to check out these essays on the topic of O'Neill colonies:
http://www.hobbyspace.com/AAdmin/archive..._1_18.html
http://www.hobbyspace.com/AAdmin/archive..._1_19.html
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It's funny reading some of the opinions here, and how rooted they are in a scarcity mindset and a rejection of ambition. Here, of all places!
Going to Mars does not preclude any other activities in space (Earth orbit, Moon, asteroids, etc.) - and would in fact facilitate them. It's perfectly reasonable to question the crony capitalism and taxpayer subsidies involved in Musk's ventures, but much as I hate it myself it may well be a more effective and successful use of taxpayer money than the vastly higher sums flushed down the NASA toilet every year, and may in the long run cause NASA to spend less.
While I don't like Musk and have regarded him as a charlatan from day one, I have to give him props for having huge ambitions and actually working to achieve them, however impractical or unrealistic they may seem (or may turn out to be). Even if he ultimately fails, he's shifted the perceptions of what can be done in space. There used to be this thing called the "giggle factor", in which the public and investors saw space as the province of government agencies and a few huge companies - space was hard and expensive, so talk of space entrepreneurialism let alone colonization was the province of nerdy kooks who read too much sci-fi. But notice how many private space companies and sub-industries (think cubesats and microsat constellations and launch-sharing services) that have popped up since he founded SpaceX in 2003 - and then think back to 2003 and how "private space" amounted to Boeing, Lockheed, Raytheon, Loral and other companies that act as subsidiaries of the US Government (or the similar counterparts in Europe, China, and Russia). That wouldn't have happened had Musk merely talked about what was possible to do now, with off-the-shelf technology, and how he could do the same as the big companies the way they've always done things only in some way incrementally more efficiently - we know this, because every previous entrepreneur in space had talked that way, had soft-pedaled ambition and vision in favor of non-threatening, realistic, marketable practicality. And they failed.
Even if Musk eventually fails, he has killed the "giggle factor" just by articulating his ambitions and acting on them. So, yes, criticize his picking your pockets to do it, absolutely. But rethink criticizing him for having big dreams and a big vision, especially when (charlatan or not) he kicked off a revolution of the entire industry as a result.