Forrester ran as a center-right candidate, more to the center than the right, a very moderate position. He had the support of the full party machinery. He performed well in the debates. He got trounced by a liberal retread, getting all of 44% of the vote.
If we rewind to the Governor's race, Bret Schundler got little, if any, support from the party, running as a solid conservative. His performance in the debates was erratic and disappointing to his most ardent supporters (he was not as energetic or eloquent as he normally is). He got 42% of the vote, merely 2% less.
What does this mean? It may mean that neither ideology or party effectiveness mattered. Or it may mean that had Schundler gotten full party support, which moderates always insist on from conservatives but often hesitate to give when the roles are reversed, he would have done better.
But one thing the data does not support is that NJ's problem is that it runs too conservative candidates. One could argue that it was the running of liberal/moderate Republicans (and winning with them) that accelerated the state's leftward tilt.