The old "big rockets aexpensive" canard (was Saving energy is sil

> Higher delta-V's require larger systems which are more expensive to build and operate.

Where did you get the idea that larger rocket-based launch-systems are more expensive than smaller ones to build and operate?
http://www.dunnspace.com/leo_on_the_cheap.htm

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Dergarabedian developed a heuristically derived relationship to compare launch vehicles developed according to traditional maximum performance/minimum weight criteria with those optimized for minimum cost. His results indicated that a low-cost launch vehicle could be developed with the same payload capacity (and with a heavier overall booster weight) as the Saturn V, but having nonrecurring and recurring costs that are five-and-a-half times less. These cost reductions are enabled by the simplified low-cost vehicle's radical reductions in the cost of research and development, testing, and the required management of interfaces (since the interface count would be greatly reduced). The cost of direct labor (engineering, fabrication, assembling, testing, procuring, and documenting) and burden (overhead labor, capital equipment, facilities, and paid absences) would be reduced tenfold. In the case of the Saturn V, the cost of materials and propellants was only three percent of the total system cost, so the higher weight of the low-cost vehicle(relative to the Saturn V) would not come close to overwhelming its cost advantages in other areas.67

Low Weight Does Not Equal Low Cost. Retired TRW executive and rocket engine designer Gerard Elverum stated that for launch systems "cost as a design selection criteria . . . ought to be, in fact, the [dominant selection criteria] rather than high performance and low weight. In my opinion, low weight does not equal low cost. If you haul coal up and down the Mississippi River in a bunch of [speed boats] you've got low weight and high performance, but it's a very expensive way to move coal from one place to another."68 Robert Truax said of traditional aerospace cost estimating techniques: "Most costing formulas are tied, directly or indirectly, to the weight of the product. For highly engineered devices, such as most launch vehicles, cost is less sensitive to weight than almost any other physical parameter."69

There are a number of cases in which smaller and lighter vehicles cost more than larger systems, a fact which tends to invalidate the idea that weight has a dominant influence on vehicle cost. For example, the Thor ballistic missile was approximately 10 times larger than the Agena upper stage but actually cost less. Since both were liquid-propellant, single-engine rockets, factors other than weight were making major contributions to vehicle cost.70 Similarly, the Delta launch vehicle, which is much larger than the solid-propellant Inertial Upper Stage, costs about half as much.71
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> the Saturn 5 could have been a much smaller rocket and Apollo missions would have been less expensive.

Making the Saturn V rocket far-larger might have slashed the cost of the Saturn V. See the above, and please study Leo on the Cheap.

> The 1/20 delta-V advantage of the lunar surface over the Earth's surface is a significant advantage

We all know that. We also know it isn't the only significant factor in comparing Earth-launch to Moon-launch. Lower gravity is only one of many of the moon's negative operational factors.

> and one which will easily outweigh any operational difficulties relating to the moon's lower gravity. [...] the costs savings associated with this energy difference will pay for

Saying "will easily outweigh" and "will pay for" is reaching conclusion without enough information. You're not only, here, discretely prediction the future, but you are doing so while discarding relevant factors (such as Earth's money-saving diverse and comprehensive industrial and trade base; the Earth's work-pleasant atmosphere; the Earth's cheap and abundant natural-resources; the fact the not only ore, but instead or along with it value-added products, can cheaply be launched from Earth given an existing large-scale MDC launch program that might necessarily be in place in the absence of a lunar-mass-driver; etc.).

Regarding the "1/20 delta-V advantage", if a large (and therefore drag-loss reducing) rocket on Earth can deliver payload at high-g (reducing gravity losses) from the equator (.465 km/s dV for free, plus reduced drag-losses) to LEO with 9km/s dV, and if it takes a mass driver at least 2.53 km/s dV to launch to EML2, the launch-energy ratio is only 12.65. Even 10 km/s vs. 2.53 km/s gives an energy ratio of 15.62.

If the Moon-launch dV needs to be raised to 3 km/s to compensate for
drag-losses associated with the lunar astmosphere, the energy-advantage ratio drops further to 9.

The Moon-to-EML2 dV budget is listed here:
http://en.wikipedia.org/wiki/Delta-v_budget#Earth.E2.80.93Moon_space_budget

Lunar atmosphere:
http://en.wikipedia.org/wiki/Moon_dust#Moon_fountains_and_electrostatic_levitation
http://en.wikipedia.org/wiki/Atmosphere_of_the_Moon

Perhaps the industrial activity associated with the mining, pelletizing, launching operations on the moon would add further dust and gas to the lunar atmosphere -- particularly near the mass-driver. Therefore, over time, it might get progressively more difficult to blast pellets through the lunar atmosphere to EML2.

By the way, the moon librates. How might the mass-driver launch-and-catch system compensate for the librations of the moon?
http://en.wikipedia.org/wiki/Libration

Can the mass-driver be dynamically aimed? If the catcher is using delivered-pellets as reaction mass to compensate for the libration-induced inconsistent aiming, that counts as a further cost in the launch-and-catch system.