present circumstance is a partially completed Ares I.
So if one is to compare costs vs capability that sunk cost should be deducted before a comparison. however most comparisons I've seen are not doing this.
Not to mention a rather distinct tendency to understate costs on the alternate options.
One of the main cost drivers on the Ares is that it's 2 launchers being developed and not 1. items that are on the critical path of the Ares V has been forced upon the Ares I. And so has the costs of those items. some of those expenses are at least partially sunk as well. I'm referring to the new J-2X Engine as prime example.

In the case of using a separate rocket for crew than for cargo it was a decision made with safety in mind. the decision still seems quite reasonable to me. one rocket that can be maximized for safety while the inanimate stuff goes up on a rocket where a loss is a cost issue rather than a disaster.

Ares I has several safety selling points for the role of a crew only launcher. It's being designed for the safest trajectory, it will have no black zones. it's first stage is a single engine witch means it's initial launch has only a single engine failure point when leaving the pad. besides solids do not explode when they fail. if it faisl in other ways then the LES will be able to pull the capsule away easily enough. that is what it is designed to do after all.What you launch the cargo missions on. well. there are still time to adjust the options. but retaining shuttle technology and pad architecture should not be on the list of priorities.
Getting the sorely needed large fairing Heavy lift vehicle needed to go to the moon and beyond otoh. That should be number one.

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