I've seen many 'moderates' take this pearl of wisdom from Reagan out of context to defend the GOP, who would rather switch than fight lately.
Actually he was describing his tactics when the crafting legislation.
Reagan certainly never surrendered his principles before the battle was even joined, a favorite tactic of 'practical' republicans.
Reagan campaigned on a platform of balancing the budget and cutting government spending, but he also wanted increased military spending and taxcuts. Reagan comprimised to get what he wanted. This is not a slam on Reagan. It is smart politics. In order to pass legislation you need 60 votes in the Senate just to release a bill from cloture. Reagan never had 60 hard core conservatives in the Senate. He had 35 - 40 solid conservative Republicans and 20-25 RINOs and DINOs that were willing to give something if Reagan would give something.
Politics is by its very nature a tradeoff and those who refuse to trade get nothing, and most often get screwed. I present Patrick J Buchanan as proof. 1992's hero of the far right and harbinger anti-Christ to the beast Clinton.