I think you're right. There aren't enough conservatives in this country to elect a conservative president by ourselves--we win when the "moderates" perceive that it's in their interest to vote for a conservative candidate, as they did with Reagan. Unfortunately the majority of voters are either liberal or "moderate" (I believe conservatives only make up about 30% of the electorate), and the "moderates" tend to pay very little attention to the issues, so they don't really know what various candidates stand for.
I think you have described the underlying condition that enables candidates such as McCain, Romney etc.. They adhere to the policy that an essential middle must be wooed, in relatively good times, to be successful.