To the extent that he rips on the RNC as a whole for being out of touch with the grassroots conservative movement, he's right, but the answer is not to go haring off into the weeds of capital-L Libertarianism, which hasn't even managed to get one Congressman elected from any of the 50 states. Ever. As I've commented before, "hard" libertarians such as Glenn Reynolds vote for GOP candidates because they don't think most Democrats are reliable when it comes to taxes, spending, defense, or the Second Amendment. "Soft" libertarians, on the other hand, don't give a shit about defense issues, get mildly irritated about taxes and spending, and in the end vote for Democrats because they think the Democrats are better on privacy issues. They ought to ask Michael Steele how well that concern for privacy worked out for him when he ran for the Senate a couple years back. Better yet, ask Chuck Schumer and the DSCC.
So in order to attract disaffected libertarians back to the fold, the party needs to follow the example of the House Republicans and start sticking the knife into the pork & power-mad Democrats at every opportunity, starting with the "crap sandwich" (h/t Jonah Goldberg & Monica Crowley) of the stimulus bill, rechristened by Rush Limbaugh "Porkulus". The compassionate conservatism that W brought to Washington needs to be taken out back and shot like Old Yeller, and never brought up again except to remind people what a bad idea it was. I think that Governor Palin knows this instinctively and isn't likely to try a repeat; she's more likely to go through the Federal bureaucracy (including, quite possibly, Congress) rooting out corruption. It's what she's best known for in Alaska, and is something badly needed in Washington.
But first, Steele needs to make it clear that the RNC is ready to play a whole new ball game and not just repeat the dumb mistakes of the last eight years. Social conservatives, fiscal conservatives, defense hawks and hard libertarians need to kiss and make up, or at least agree to work together against something far worse: a Federal government solidly controlled by the Democrats, who in just one brief month have shown themselves ready to excuse all manner of amorality and corruption so long as it serves the greater "good" of the New New Deal, which they hope will lock up the levers of power in the' hands of the New Left for another half-century.