I think you are confusing the speed at which the earth orbits the sun (~29.8km/s) with the speed at which an object needs to travel to maintain earth orbit (~7.8km/s).
Whoops, you are right. I think it's too late to edit my original post.
The point still stands, though, you have to get to nearly 8km/s otherwise you aren't in orbit and you fall back into the atmosphere.
You can't get to anywhere near that speed while still in the atmosphere - SR-71s only manage about 1km/s, and because kinetic energy is proportional to the square of the speed, at that point you are only 1/64th of the way there.
To get to an appropriate speed, you need to accelerate eventually. But it's easier to do that at a higher altitude, where you have thinner air to travel through: less drag, less severe transonic effects to mitigate and, on the way up, a wider variety of air-breathing engine types to choose from (including the Astro Mechanica one).
The wider variety of air-breathing engines points out a problem: the launcher necessarily goes through a wide variety of aerodynamic regimes where different engines work. Making a single engine that works over a wide range of speeds is difficult. And for what? Using more fuel in a larger first stage just so you can save on cheap oxidizer (LOX at $.10/lb)?
