At the time, a lot of people were upset that we were missing out on that opportunity. Instead, we ended up with a 100 billion dollar space station, but one single External Tank could have performed a similar task a decade or so sooner. More External Tanks, more space stations. Eventually a better, cheaper space shuttle would have to be developed to serve all those space stations.

Instead, all we got was what government wanted, which is not much for a lot of money spent.

“Repurposing rocket upper stages for use as habitats could dramatically lower the costs associated with human space exploration, by nearly eliminating both fabrication and launch costs through reuse. After being proven in LEO, the Ixion Initiative Team’s approach can be used to create deep space habitats from any future rocket upper stages, including the Space Launch System’s upper stage, which would provide a substantial amount of volume and capability for human exploration missions to the Moon, Mars, and beyond.“

I’ve been upset for years of all the giant aluminum tanks that went into space with the space shuttle just to be scuttled back into the atmosphere. Enough thick, high-volume bottles to make several space stations. I’m glad someone is thinking ahead and doing something about the waste of resources.
Upper stages can also be used as habitats on the moon, built for this purpose untell underground facilities can be created… And the same for Mars as well as power plants.
If you mine ice from the Martian pole cap place it into a container with a nuclear battery, The heat will liquefy under pressure the carbon dioxide so that you can remove water and nitrogen and other elements before releasing the gas through a two stage turbine to create electrical energy. Once the high pressure carbon dioxide is released, it refreezes to the ice cap.
Tunnels in the ice from the mining can be used as pressurized living quarters without the danger of unknown gases being released from rock.

Nuclear energy is the key.

Sierra Space has already suggested that they may make their Life module into its own space station, so the idea may come to pass.

About eight years ago NanoRacks, Space Systems Loral, and ULA were exploring repurposing spent upper stages for use as space stations or space station modules. They called the team Ixion. I have not heard (or don’t remember) what came of that study.
https://www.maxar.com/press-releases/ixion-initiative-team-signs-contract-with-nasa-to-study-the-conversion-of-rocket-upper-stages-into-space-habitats

It seems that the same team is the one working on Axiom.

Starship may also become a space station for NASA, but it is not part of the CLD (commercial LEO destinations), and I haven’t heard anything since this article, either:
https://www.space.com/nasa-considering-spacex-starship-space-station

Agree on all points.

Something I’d like to see Vast, Gravitics, Sierra Space and LockMart collaborate on is a standard design for a large-diameter structural, utility and access interface for large station modules that allows for an open-ended number of attach-detach cycles as well as emergency closure in the event of module depressurization. A standard design for some kind of emergency Earth-return escape pod, and associated station interface is also needful.