"Extremism in the defense of liberty is no vice." -- Barry AuH20
When a party loses power, they have two choices -- go back to their core beliefs (thus theoretically making them "stand for something") or broaden out to moderate (thus theoretically making them "more generally appealing"). This party soul-searching is a normal part of the process. Sometimes, the more extreme/"pure" wings gain dominance and the results are usually poor (think Goldwater for the Repubs in 1964, McGovern for the Dems in 1972).
Barney Frank had an interesting line recently when asked why he was having trouble working across the aisle with Republicans the last few years. His response (parapharased) was that half of the folks were like Michelle Bachmann, and the other half were afraid of getting primaried by Michelle Bachmann. Having said all of that, though, the Republicans have rejected the more extreme candidates for President in favor of what most would consider to be the moderate of the group (when compared to Bachmann, Perry, Gingrich, Santorum, Paul). And again, it's not much different than 1980 or so for the Democrats when moderate Dems were challenged on the left by the Ted Kennedy crowd.
Very interesting interview, thanks for posting it.