I am sorry to hear that the Aries 1 rocket is having problems. This explains why the capsule size was reduced. If they are having to make major reductions in the payload to get the rocket to fly it soon becomes the wrong rocket. Using the return motors to gain initial LEO orbit is not how things are meant to work.
http://www.directlauncher.com/If the problems are a significant as the report says dropping Aries I and replacing it by a much bigger rocket makes sense. At 22 metric tons (mT) payload Aries I is less than the 23 mT Delta IV heavy, which has already flown and actually gets to LEO.
The case for replacing Aries I by 70 mT DIRECT (or Delta IV) is strong.
I am not convinced the larger 98 mT version of DIRECT is the correct replacement for the 130 mT Aries V.
Andrew Swallow