You have to factor in that a Paul candidacy may make Hillary seem like the reasonable one.
If the GOP is ‘yay WOT, more more!’, and the Paulists are ‘out now’, then Hillary saying ‘We need to be responsible, fix it and split’ ... that covers both bases and positions her in the warm, confortable middle for most people.
Good assessment. Also if the “real” conservatives don’t get their way and Rudy, Romney or McCain is nominated there may be another third party candidate that could step forward to quell their angst (e.g., Keyes?). Again, tapping off just enough of the vote...