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I remember when this came out. Afterwards, there was a lot of talk that Popular Mechanics had been "taken:" disinformation, if you will. The X-33 was cancelled by NASA, necessary work never completed, after Lockheed botched development and asked permission to overrun several hundred million dollars on a (I think) $300 million contract. They didn't get it.
It's conceivable that Lockheed and the Air Force continued work on the X-33 in secret, but why bother? Would have been easier just to have the Air Force go in with NASA to continue development, officially or unofficially. Anyway, the thing is a rocket, and not a small one. If they were doing rocket launches, even suborbital ones, out in the desert, it'd be pretty damned hard to hide. A rocket launch leaves quite a contrail.
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