Bull. The X-33 was progressing as planned until NASA demanded that they use composite materials for the fuel tank. Engineers were forced to develop very heavy joints for the composites to make the right shape. The tank ended up being heavier than it would have been were it all aluminum. The project was ended when it was about 90% complete. The demand for some stinking composite materials is what screwed the program over.
Look here for the management/budgeting disaster; in short, NASA didn't develop cost estimates for several years (!) after the program started, despite it being considered risky and difficult. So, the budget ballooned from $1.1 billion to $1.5 billion (with over $1.2 billion actually spent by Lockheed and NASA combined) by the time of cancellation at the same time that the satellite launch market collapsed, removing the main source of flights from the manifest. This would have made it extremely difficult for the VentureStar to pay for itself.
The design itself was riskier and more complex than the Rockwell or McDonnell Douglas proposals (particularly the Douglas one, as it was based on the DC-X), as noted here quite early on in the program. The infamous composite LH2 tank, for example, was so problematic because it had to be multi-lobed (very experimental, look here) And why did it have to be multi-lobed? Well, because the Lockheed design was a lifting body. The Douglas or Rockwell designs could easily have used an axisymmetrical tank, which would have been cheaper and a whole lot lighter--the composites probably *could* have worked just fine for them.
The composites were a very early part of the program (this article implies that they were chosen within months of the contract being let) and selected in part by Lockheed, not NASA; in fact, NASA dinged points off of the other designs because they didn't need or necessarily use composites.
Finally, while I don't seem to be able to find my source (though I suspect it might be found somewhere in here), I recall that the targets for the X-33 had dropped dramatically from 1996 to 2001. Something like a fall of 50% in target top speed, drastic fall in max altitude, etc. So the X-33 went from a reusable exotic high-speed aircraft that could venture into space to something much less ambitious and less able to serve as a progenitor for actual future SSTOs (which X-33 was not and was not intended to be).