I think Mr. Steyn's article is interesting, but I think he misses a few key points.
First, he implicitly assumes that the GOP is all that interested in conservatism. I disagree. The GOP, like the Democratic party, exists to get it's members elected to political office. Hard stop. Ideology is a secondary concern. To the extent that it's even considered.
The recent GOP leadership votes in both the U.S. House and the Senate underline this in bright red. Particularly in the House. GOP representatives had the opportunity to embark on a fresh start and elect a bona fide conservative as their majority leader. They instead picked a defensive strategy and business as usual. And the margin by which they picked that course of action speaks volumes.
Second, Mr. Steyn didn't consider the structural problems that the GOP is facing at the ballot box by way of immigration. I found it interesting that hispanics broke 7-3 for Democrats in this last election. Given that some sort of amnesty deal and future citizenship is a pretty good bet at this point, that spells a structural disadvantage that GOP will be hard pressed to counter. Regardless of whether the GOP is able to pull various disparate factions together.
I don't think the GOP has a very good chance of regaining a majority in either the House of the Senate in 2008. The Presidency is very much in play, but that's about it. And after 2008, the structural advantages that the Democratic party has will really begin to kick in. Now of course the Democrats could always mess things up like they did in the early 90's with socialized medicine. But I don't think that likely. And waiting for the opposition to mess up is not exactly a strategy.
Lest you think I'm bearish on conservatism, I'm really not. I'm very optimistic about the future of conservatism. But not because of partisan politics.
I believe the GOP leadership does not expect to win and probably does not want to win. They don't want to change so they have contented themselves to a minority party status. That is why they have a defensive stance and have signalled they will folow the Democrats' lead.
The Republican Party proved in the 80's with Reagan and in the '90's with the Congress that it can "get its members elected" by proposing conservative policy positions, appealing to the best in people, and exhibiting honest leadership. That just happens to add up to a conservative philosophy but not many people will vote for the philosophy alone.