I think that is probably the actual reason. Musk probably fired most of NASA, and then realized that the absolute carnage would in this case impact him personally, and it suddenly became an important issue and he needs to have them all rehired so that they can keep paying him his contracts. He still doesn't give a shit about other people's contracts / medications / intelligence operations / statutorily enforced payments / whatever.

The problem is that so many other companies also get their money from NASA. Cutting out NASA makes it a clear pipe from gov to spaceX.

Of course, so many other projects NASA is running will also just die, but those don't even help Elon anyway so they're pointless. Or so.

In practice, you're probably right.

But in terms of "I wanna cut waste, and make the government lean! So I am gonna delete the space part of the government and replace it with my own!"

Just sounds bad, like really bad. Even worse than the armored Teslas. I can't imagine NASA is the top of people's lists of "utter wastes of time" It's not a regulator, it's not in the "known enemies" list unless you're a flat earther. I dunno how you spin it to be palatable.