Why is Romney trailing?

Given the lackluster economic news, the ballooning federal debt and the high unemployment rate over the past few years, the Republicans ought to have no trouble at all defeating President Obama. But in fact the race is close, and at present favoring the Democrats by a few points in most of the key "swing states". InTrade odds currently favor Obama winning re-election, as do most of the election models.

Romney, while not charismatic or an especially good speaker, has the kind of successful, hard-headed business background that ought to recommend him for the job in the current economic conditions.  So why is he not leading by a healthy margin?

My own interpretation is that the Republicans have made a very serious tactical error over the past decade or so by allowing the religious right to introduce contentious social issues into the mainstream Republican positions, and have exacerbated that error by purging the party of any who don't meet the religious right's "litmus tests" on these position.  Of course Republicans count on the religious right as a key part of their base, just as Democrats count on unions as part of their base.  But in fact, who were the religious right going to vote for if Republicans didn't champion their social programs?  -- not liberal Democrats certainly.

Republicans would have been far wiser to simply stay mute on contentious social issues like abortion and gay marriage, and keep their focus on economic policies. That would have earned them a solid block of independent voters who are concerned with the Obama administration's current policies. Instead they have thoroughly alienated much of the independent vote with their religious emphasis, and will probably lose this election as a result.

The question is, will the Republicans learn anything from this (probable) defeat? Or has the party by now been so purged of all but the right-wing "true believers" that they are unable to change their direction and move back to the center?  If that is the case, it is not good for the nation. Our political system needs both parties to be vital and competitive - that competition is what keeps the parties honest and pushed toward the center.  If one party becomes so extreme that it is seriously weakened, that removes critical restraints from the other party.

Given that we have serious national problems, at this time especially we need both parties to be strong because we need to have serious national debates about how to restructure our government, reduce our debt, rethink our unsustainable entitlement programs, improve our educational system, and a dozen other critical issues. If one party is completely dominant we will simply get their version of the solutions, without a good national debate, and that will not be good for us.