Yeah, that's a fascinating and little-told part of the X-33 history. "Ready to fly" is perhaps a slight overstatement, but the tank problem had basically been solved in two different ways (switching to an aluminum-lithium tank was feasible with the tech demonstrated by the second generation Shuttle external tank, but also, cryogenic carbon fiber technology improvements were demonstrated and ready). X-33 certainly could have been made ready to fly, and DoD was ready to fund it. The other successes of the X-33 program have been overlooked, largely because the vehicle didn't fly. The program was not able to demonstrate the turn-around time and other aspects of the overall system design, which were intended to reduce operations cost.
Bush also torpedoed NASA by giving them the directive of going to the Moon and Mars without funding the directives. This led NASA management scrambling to "get on board" with the Bush directives, with the only mechanism available to them being to cancel all the programs which were designed to advance technology and lower cost of access to space. Oh, and shut down the ISS prematurely.