Although it's true that plutonium is, in fact, one of the most poisonous (and carcinogenic) substances known to man, it's not necessarily the case that it would spread throughout the upper atmosphere from a spacecraft explosion. This is true because the most common use of plutonium in spaceflight is as a nuclear battery, whereby the heat given off from the plutonium serves to generate electricity for spacecraft systems. When used as such, the Pu is typically encased in a solid ingot of shielding metal; it is not simply a piece of Pu metal on its own. These ingots are extremely durable. Tests done on the one used in the Cassini probe showed that had it been dropped in the upper atmosphere, it was by far the most likely to simply plummet to earth intact and bury itself where it landed (or sank as the case might be). These ingots are designed to transmit warmth but not gamma radiation.

While I can't profess to being glad that a bunch of innocents got killed, and I look with not a little contempt at the use of this event as a political football (even though I'm about to do so myself, in a way), there was a direct upside to the Challenger Disaster. NASA had subcontracted the construction of the fuel tanks to a company in Utah (I think) for political reasons. The broken logic that led to this design decision caused a breakdown in the rest of the system. Also, the launch was carried out in unsuitable weather conditions, because the mission had already been postponed once, and the president had been invited, so postponing the mission again would have caused them a loss of face. How ironic.

If Challenger hadn't crashed, NASA would never have re-evaluated their policies (or at least not so soon).

I was watching a program on TLC about space junk. Apparently radioactive payloads have been going into space at least some 26 years before the shuttle explosion. And it's also reentered the atmosphere a couple times.

A Russian craft used plutonium to keep its avionics warm. Bound for Mars, it fumbled on takeoff and wound up stuck in low earth orbit. It circled Earth a few times and reentered the atmosphere. The Russians claim it landed (harmlessly...) in the pacific ocean.

A Pu laden US experiment from the 60's called SNAP 9A was part of a malfunctioning Navy spacecraft that said oops and sprayed itself throughout the atmosphere. It was said that everyone now carries a small quantity of plutonium in them due to this event.
Which was interesting but a bit weird. I can think of a couple ways Pu can bridge a generation, but the show didn't go into it. NASA claims SNAP burnt up in the upper atmosphere, "as designed", and said nothing about mass plutonium poisoning. Intriguing!

NASA has launched 38 of these RTG's (radioisotope thermoelectric generators) so far. Here's another one:

"An experimental nuclear reactor power system, the SNAP 10A which used thermoelectric power conversion, was launched by the United States in 1965 and worked satisfactorily for 43 days until shut down. It is now in a very high orbit where it will remain for hundreds of years." ---nasa.gov
Neat. I hope they put a "Plutonium On Board!!!" placard in it's rear window, to warn off future space travelers from Earth or otherwise.

The modern US probe Cassini carries around 72 pounds of plutonium. In August of 1999 it performed a gravity assist swingby in order to speed it's quest to Saturn. It flew within 725 miles of Earth, and (according to NASA) would have vaporized 32-34% of the Pu into the atmosphere if it accidentally reentered. That's around 25 pounds of plutonium. Originally it was to fly within 312 miles of Earth, but the figure quickly grew due to public outcry.

Sources:
A space show on TLC (Didn't get the title, clicked in halfway through)
http://www.animatedsoftware.com/cassini/
www.nasa.gov

Mat catastrophe's node claims that if Challenger had carried plutonium on board, "it would have been spread throughout the entire upper atmosphere, and possibly cause upwards of 90% of the planet to develop cancer". Sorry, wrong. No. Nope. Not even close. First, Challenger made a pretty big bang, but Challenger's lander was not destroyed, but in fact impacted the sea a few minutes after the accident. The astronauts on board were not all killed by the explosion. In fact there was a clear signs that one or more of the astronauts was alive as someone had activated air bottles, presumably due to depressurisation. However, it is likely that they passed out quickly due to the extreme altitude- although it is not known exactly how fast the air leaked from the damaged vehicle. Postmortem was unable to pinpoint the moment of death after recovering the bodies after 2 weeks in the ocean.

But in that accident; the lander lost one wing and the tail due to aerodynamic forces - the crew section was fairly intact upon impact at about 200 mph with the ocean. Nuclear materials in any plausible container would have survived any such an accident without any dispersal at all. None. No deaths. 72 pounds? Still none.

Even an accident somewhat like Columbia that led to its dispersion of any nuclear material in the upper atmosphere would not have killed many people on the ground. We more or less know this from experience, unfortunately. In 1968; a satellite, Transit 5 burnt up, as it was designed to in certain situations, depositing 1 kg of plutonium in the upper atmosphere. No peak of deaths in the early 70s was noted, even though many sources still maintain that 1kg of plutonium is 'enough to kill every man, woman and child on the planet'. You may draw your own conclusions from your and our continued existence and try to explain why 72 pounds is supposed to wipe everyone out, but 2.2 pounds didn't even noticeably change the death rate.

Incidentally, modern containment systems would be designed to reenter successfully from any altitude, for example by encasing the object in copper. This is the technique used by some ICBM reentry capsules. So even Columbia wouldn't have killed anyone.

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