The operation of satellites in very low Earth orbit (VLEO) has been linked to a variety of benefits to both the spacecraft platform and mission design. Critically, for Earth observation (EO) missions a reduction in altitude can enable smaller and less powerful payloads to achieve the same performance as larger instruments or sensors at higher altitude, with significant benefits to the spacecraft design. As a result, renewed interest in the exploitation of these orbits has spurred the development of new technologies that have the potential to enable sustainable operations in this lower altitude range. In this paper, system models are developed for (i) novel materials that improve aerodynamic performance enabling reduced drag or increased lift production and resistance to atomic oxygen erosion and (ii) atmosphere-breathing electric propulsion (ABEP) for sustained drag compensation or mitigation in VLEO. Attitude and orbit control methods that can take advantage of the aerodynamic forces and torques in VLEO are also discussed. These system models are integrated into a framework for concept-level satellite design and this approach is used to explore the system-level trade-offs for future EO spacecraft enabled by these new technologies. A case-study presented for an optical very-high resolution spacecraft demonstrates the significant potential of reducing orbital altitude using these technologies and indicates possible savings of up to 75% in system mass and over 50% in development and manufacturing costs in comparison to current state-of-the-art missions. For a synthetic aperture radar (SAR) satellite, the reduction in mass and cost with altitude were shown to be smaller, though it was noted that currently available cost models do not capture recent commercial advancements in this segment. These results account for the additional propulsive and power requirements needed to sustain operations in VLEO and indicate that future EO missions could benefit significantly by operating in this altitude range. Furthermore, it is shown that only modest advancements in technologies already under development may begin to enable exploitation of this lower altitude range. In addition to the upstream benefits of reduced capital expense and a faster return on investment, lower costs and increased access to high quality observational data may also be passed to the downstream EO industry, with impact across a wide range of commercial, societal, and environmental application areas.