RE: "is it your assumption, that more volume of product, if the production challenges could be overcome, would result from developing bacteria in vats versus silkworms spinning cocoons?"
Nothing I said implied that, IMHO. IF production from mechanical spinning of silk were ever competitive with KBLB's silkworms then the competition would cause the price to drop, as it always does and, presumably that would result in an increase in demand and hence in volume of production. But it would be the increase in demand as a result of lower costs that resulted in increased volume of production and not something inherent in either production method. Either method is capable of being ramped up to whatever level is necessary to meet demand.
RE:"If the bacteria in the vats could be effectively converted into silk, would it be a faster way to produce volume of product?"
I'm not sure what you are getting at here, for either method of production (again, assuming that mechanical spinning could be made to work) you'd just build the facilities required. While the actual vats to grow the bacteria in would be a relatively small space, there are a LOT of associated support structures, facilities personnel and equipment required: lab space for quality control, etc, extraction facilities, storage of raw materials and finished product, support facilities for the personnel, so you still wind up with a factory, PLUS there's the facility for doing the mechanical spinning.
Facilities for growing silkworms are vastly lower tech and less expensive, as are the personnel. Same thing goes for the reeling and spinning of the silk. While currently labor intensive there's probably a great deal of room for mechanization if circumstances make that more attractive (higher general wage levels,etc)
But the same thing applies: its vastly less expensive than a mechanical spinning facility would be. MOST IMPORTANT POINT is that for both the facilities for growing silkworms and for reeling and spinning, EVERYTHING, including the reeling and spinning equipment would be BOTH OFF THE SHELF AND VERY LOW TECH. Standard electrical motors and controls would be about as technical it would get.
In stark contrast, virtually everything in the bacterial production facility would be VERY high tech albeit off the shelf. I attend a 1 week course in bacterial fermentation cGMP etc recently and they showed some samples of parts: low production level very complex stainless steel with lots of stainless steel welding etc. Just a valve could run into the thousands of dollars!
For the mechanical spinning facility it would be far worse: Every thing would be high tech. A great deal of it would be custom made. The expense of custom made high tech equipment is astronomical! It would make the biofermentation equipment (which as a large production run) look dirt cheap by comparison! And ALL of that has to be added to the cost of production. That is competing with silkworms that reproduce themselves. Just for the fun of it! (And a few mulberry leaves thrown in!)
Those working on mechanical spinning have been banking on silkworms not working. Once KBLB announces pure spider silk they are not going to continue down the same path. They will most likely switch their research to some related area that makes the most use of their equipment, personnel and knowledge as possible. That is dead standard practice for biotechs that have been beaten to a product and have no realistic hope of competing with their competition. But to hear them talk, you'd never dream that they would give up until suddenly one day they announce, oh, BTW we're going into XXXX. And, incidentally we're phasing out our XXX.
Sometime in the future spider silk (or by that time, far superior fibers) will be produced by mechanical spinning. Just as someday meat will probably be grown in tissue culture rather than taken from animals. But don't hold your breath. (OK mechanical spinning is not THAT far away but you get the idea: not in the near term and very unlikely in the intermediate term either.)
