They lost because they ran as managers of the welfare State, not changing it.
The Republicans have never really had the numbers to be able to go hard-core. Consequently, they’ve always had to draw from the moderates to get anything passed, which gives moderates an inordinate amount of power.
Why do they never really have the numbers to support very Republican positions, one might ask? Because the Republican-puritans tend to stay home when they don’t get their way.