The "moderates" that the pundits seem to think left the Democrats in fact voted for Democrats by a 16 percentage point margin. Yes, this is down from a 60%/38% split in 2006, but it still belies the notion that moderates support teabagger policies. I suspect that the moderates who stayed home said "A pox on both your houses" -- not because the Democrats were too liberal, but because the Democrats don't seem to stand for anything and can't even sell their own policies -- perhaps because by the time they get done capitulating to Republicans, ther's nothing to sell. Yes, there are moderates who respond to "Look! Shiny!". But there are those who simply don't have time to dig into the minutiae of a healthcare bill with giveways to the insurance industry -- even if it DOES turn out to be a boon to them in 2014 (which yet remains to be seen). They call themselves moderate for a reason -- they aren't doctrinaire on either side of the spectrum. Whoever convinces them gets their vote. By selling out to the looney right, the Republicans didn't get their votes, and by appearing weak and spineless, Democrats didn't give them reason to vote.
The answer isn't for Democrats to be more like what Republicans used to be. The answer is for Democrats to be proud of being Democrats -- instead of hiding under the table and hiring Alan Simpson to destroy Social Security so you can call yourself "fiscally responsible" and "bipartisan."
(UPDATE: Krugman does a nice job of smacking Evan Bayh around here.)