That was the pitch. He was lying.
I watched the whole thing happen, and saw it differently. I believe that Arnold really believed in what he was saying. He just had no idea what that really was.
Because he wasn't standing on firm conservative principles in his heart (and mind), he was soon overwhelmed by the enemy's politics and pressures.
The Democrats were better than him. They, at least, believed in their philosophy of government.
Arnold was little more than a squishy actor, spouting Republican talking points. He didn't stand a chance against those Socialists, because he didn't have a solid backbone built from core conservative principles. He blinked, and lost the state.
He's probably so confused now, that he's not quite sure what happened.