I'm just a hobbiest but I have tried to look into this. We really need to talk about the first and second stage differently. Of course Elon is a great one for communiality in the way he build things, common fuel, common engines and so on. He does this agian with Starship/Super Heavy, Metholox, Raptor Engine, Steel tanks.

Lets talk about the most difficult part, the second stage, ie Starship. The big problem you have to solve, is to build a vehicle that can go from incredibly cold structure to a very hot one. Because you start very cold, and when coming back, it gets really hot.

SpaceX loves deep cryo, meaning not just going to the point of making that fuel/oxidiser liquid, but really pushing it down as far as possible. This has a number of advantages but also many disadvantages. SpaceX took a long time to perfect the deep cryo technology with Falcon 9 (that was of course Kerolox).

Because the fuel heating up it forced their operations to be very tight, and in the beginning cause many launch delays. It also cause the famous AMOS 6 failure, as a pretty interesting mostly unknown effect was taking place dring these temparatures.

The upside is that you increase desnisty and thus vehicle performance, and it helps keep your turbo pumps cool as well.

SpaceX very much wanted to continue this for Starship architecture, as they think its a huge win you are leaving on the table if you don't do it.

What this means is that Starship is incredibly cold on the pad, really as cold as they can get it. Any structural material, needs to be able to handle this. This by itself is very challanging with carbon fiber even with the best carbon fiber technology perfomrance degrades the deeper you go. It forces you to really build a carbon fiber structure like we have never seen before.

While some steels are terrible brittle under that condition, 301 stainless (and of course the new alloy SpaceX is developing) are the opposite. Their strengh actually increases, and basically the colder the better. So with incredibly cheap steel that you can make pots out of, you can basically match the performance of super expensive carbon fiber.

On the hot side, you have the reentry. Starship is design not just to come in from LEO like the Shuttle, but actually come from interplantary and then use the air to break. So this is a much hotter profile then Shuttle. And as most people know, Shuttle heat shield caused endless problems.

With both carbon fiber and aluminum you really don't want to let them get them to hot (500C is pushing the issue). Any such design basically requires packaging most of the Starship in a very thick Heatshield. Steel however is very tolerant of heat, meaning that even under fairly high tempratures (800C ish), once it cools down, your structure is still as good as before.

When designing and insulating heat shield (rather then an non-reusable ablative one) the question is really how thick, and thus how heavy does it have to be. The amount of heat that can be handled by the structure behind the heat shield, directly impacts how thick the shield needs to be.

So the combination of being almost as good as peak carbon fiber in deep cryo, and being clearly a much superior choice for reentery makes it a good choice. Once you combine that with the operational apspects, meaning both the per-unit material cost and much cheaper manufacturing its a no-brainer at that point. This is why I believe Musk called it 'The best desision in the whole design', it just made everything easier.

Another bonus is that you have access to a far larger group of engineers with experinace, plus an even larger gorup of workers that can work with steel reliably compared with carbon fiber.

Now for the First Stage, there is a good argument to be made that steal probebly can't quite reach the peak performance level of a carbon fiber design. Maybe not of an aluminum design. In this case I think its really more about material and manufacturing price and of communality with the Starship.