Indeed, if anything I think he's missing the biggest part of the failure of the last thirty years from the point of view of conservatives: the failure to actually shrink the government. Yes, individual programs were reduced (usually not in absolute terms, but there are a lot of programs that did not keep up with the size of the population and inflation). But where are the eliminated agencies? The truly slashed major budget items? You won't find them.
In the years that have been mistakenly thought of as a Reagan era (that is, from 1980 until the recent wins by Democrats), there were really only two serious efforts to cut the size of government. Reagan did pass a significant round of cuts in 1981, but after recession and then a Democratic (House) landslide in 1982, Reagan never tried again. The Gingrich/Dole Congress in 1995 tried, but failed, to slash programs, and after Clinton won the battle of the government shutdown the Republican Congresses never tried again -- not even with a Republican president and Congress.
Conservatives -- the kind of conservatives who are more or less analogous with the "public plan or else" liberals right now -- those conservatives don't like the EPA. They don't like the Department of Education. They don't like HUD, or HHS, or Transportation. They don't much like Medicare (yeah, Michael Steele gets confused about it, but conservatives don't like Medicare). Or Medicaid. I'm fairly certain that if conservatives really ran the world that they would get rid of the Consumer Product Safety Commission and the Federal Election Commission, the National Endowment for the Arts and the National Endowment for the Humanities and the National Science Foundation. The Post Office would be private. Don't like your local private school? Conservatives would rebate your state taxes used to support that school if you wanted to send your kid to private school. Social Security would be voluntary. And OSHA? Don't get them started. OSHA is why people like Tom DeLay got into politics in the first place.
And yet, here we are, after Reagan and Bush and Gingrich and Dole and Bush and Hastert and Lott and Frist and all, and all of those agencies are still in business. There's still (virtually) no prayer in schools, criminals are still coddled with Miranda warnings and evidence is still tossed (not as often, but still...) because of procedural violations.
Abortion is still legal.
This isn't to say that conservatives haven't had their victories; of course, they have. But liberals are just wrong if they think that the last thirty years were dominated by conservatives who won every battle by never compromising, by spinning the media, and with incredible discipline and organizing skill. A much more accurate story would be that 1980-2008 were an era of close party competition (not just the politicians mentioned above but also O'Neill, Wright, Foley, Mitchell, Clinton, and many others), in which neither side could get much of what it wanted. The Bush era Republicans didn't win on policy by sticking to conservative principles; they won, when they did, mostly by offering an "Eat Dessert Only" policy of tax cuts and spending increases. Even then, as Ezra Klein points out, Bush (and DeLay) couldn't get a lot of what they proposed, but what conservatives really want was hardly on the table.
Why? Because conservatives have never had the votes to get anywhere close to where they want to go. They've never had 60 Senators (let alone 60 Santorums and Lotts). Their majorities in the House were always small -- big enough to pass "Eat Dessert Only," but not large enough to even both testing their lockstep discipline for less obviously popular stuff (and, of course, much of what conservatives want isn't very popular, which is why they didn't have large Congressional majorities).
There's a sort of comfort in believing that George W. Bush got everything he wanted, because it suggests that if liberals could only emulate his tactics, they too could get everything they want.I'd generalize it to say: there's a comfort in believing that Republicans got everything they wanted from 1980 to 2008, because it suggests that liberals, having won a couple of elections, are entitled to get everything they want. But that's not how the American system works. Liberals are entitled to press hard for whatever they can get, but they aren't going to get everything they want, and it's not because of tactics: it's because of the numbers. And if liberals do get a health care bill passed that changes lots of things and gives them a structure to build on in the future, then it'll be the most important liberal victory in decades, and turning it down for any reason would be nuts.