I see your mindset on this and it is a very understandable one at that!
Being an outsider, and looking at California's demise as an outsider, what I see in Horowitz's scenario is a gradual shift to the left to appease and make everything flow to keep us strong as a nation. IMHO we have been doing that on a national basis for decades and gradually we have been distancing ourselves from what this country's creation was based upon.
I, however, question this appeasment as being something to promote the betterment of California on the issues at hand.
Again, it is a quick, and most likely, a short term fix. If it even gets to the point of fixing the problems California has with Arnold as Governor.