There are many paths to the future and not taking isn't really one of them.
While Virgin Galactic may be about rich space tourists, these people should be seen as early adopters, helping bring down the price for the rest of us. The research and development here also provides a different technology approach than the bigger space companies, which are still focusing on traditional launch vehicles.
The challenge in the space industry is getting new investments from beyond the government and communication satellite operators. Space tourism provides an alternative private form of funding, helping develop new technogies and techniques. These billionaires probably have no way of spending all their money and this provides a nice way of providing funding for space and a way for them to do something they might enjoy with their money.
As for the test pilots, well I would prefer to see an automated flight as the first test flight, followed by a manned mission, but it may be too hard to provide a good system to deal with the unknowns. Test pilots fly with a passion and accept that never returning is part of the risk. It doesn't mean they should be treated as expendible, since we are talking about lives and highly skilled people, but we should accept that there is a risk which we must accept.
For the engineers and business owners knowing that a life is at stake should be incentive to double checking everything, even the assumption that it couldn't possibly fail. Everything fails, so it is more about asking in what conditions could it fail.