All very true. Although as I note in a thread below, I'm starting to wonder whether this was truly an explosion (ie of the combustion chamber and everything), or simply a nozzle collapse following a commanded shutdown of the engine. The latter would be relatively benign, aside from some aerodynamic effects which the flight dynamics software obviously handled without trouble.
And you're right -- for reusability, they do need to get their per-engine reliability above 98%. That would produce a mission reliability of 97.1% (assuming that 2 engines out causes a loss of vehicle, which I understand is only the case during the earlier phases of flight). At 99% engine reliability, you get 99.3% per-flight reliability -- which strikes me as the point where reusability starts to become very sensible. I have considerable confidence that SpaceX will be able to do this.
And you're right -- for reusability, they do need to get their per-engine reliability above 98%. That would produce a mission reliability of 97.1% (assuming that 2 engines out causes a loss of vehicle, which I understand is only the case during the earlier phases of flight). At 99% engine reliability, you get 99.3% per-flight reliability -- which strikes me as the point where reusability starts to become very sensible. I have considerable confidence that SpaceX will be able to do this.