I'm not going to argue the relative merits or demerits of Arnold (although in his vows to reduce the tax burden and provide for everyone at the same time, I'm betting that taxpayers will lose).
The percentage of registered Republicans has little to do with it. It appears to me - a non-Californian - that if you add the numbers, Schwarzenegger plus McC bests Cruz. But the ones who are going to wind up sucking it up are the principled conservatives who will get stuck with either Schwarzenegger or Cruz. In either case, California gets a liberal, and the GOP has either a whipping boy if Arnold loses, or no incentive to change if Arnold wins. And Conservatives take it in the shorts again.
And California cements its status as one of the three dumbest states in the union.
But if Schwarzenneger wins, the principled conservtives have a foot in the door and with time and patience (like raising a child--many years of work to hopefully produce a productive adult) the republican party may take a stronger hold.
In Texas, the democrats had a stronghold. GHWB was one of the republicans who was instrumental in getting the republican party into Texas. Took a lot of roller coaster rides during those years as Texas was quite democrat and took some losses (GWB lost to a democrat when he ran for congress) but with each republican win, our message was out there better and clearer. When GWB beat the democrat incumbent governor Ann Richards, the republican party became stronger. Since then the republicans have been winning and now Texas is a republican state.