At the time of contract being awarded, it was rational. Orbital had a lot of experience building and launching stuff (not just rockets, and you also forgot Pega

At the time of contract being awarded, it was rational. Orbital had a lot of experience building and launching stuff (not just rockets, and you also forgot Pegasus air-launched rocket), and was in business for almost 25 years, while SpaceX has just started with their business and had almost no track record - 4 launches of light Falcon 1 with only 1 of them successful. So a more experienced contractor got a better price, which is natural. Now it seems to be the reversed, but it wasn't back then. It only demonstrates how much progress SpaceX made in these 3.5 years.