Matthew Yglesias has a few points worth noting: Contrary to most liberals' beliefs, American voters don't vote on "the issues", they look for people who they can identify with. Simply put: A white Christian voter will choose a white Christian politician talking about Christian family values.
So even if people are starting to really dislike Republicans because they are corrupt, ineffective and economical with the truth, they still don't like Democrats. As Matt says they may end up disliking the GOP so much that it leads to victory in the short run but it does nothing in the long run.
I think Matt is right when he says that "what's going on here is something that's a bit difficult for most liberals to get our collective heads around". There truly are two Americas, and guess what: The other part is bigger.