5. There's a pretty easy answer to that question...
It lost touch with reality for basically your entire adult lifetime, Mr. Frum. All the deals that you made, all the nutty groups you courted to win power, all the campaigns against "liberal media" and "liberal elitism", and the radicalism those things fed. You recruited these radicals -- as long as they hated liberals then the Republican Party wanted them.
You used all of that to gain power, and to enact your lower taxes, your notion of "reasonable regulation", and your imaginary "limited government", and you're just now noticing that they don't want to stop at a place that you think is reasonable. You fed this pack of beasts, and now you've discovered that since you're not completely with them, they regard you as a slacker, backslider, and backstabber, and they're happy to chew you up too.
And let's not forget how you've been a Useful Idiot for conservative billionaires who do not want "free markets, low taxes, reasonable regulation, and limited government" -- they want markets that work for them, no taxes on them (just on "the little people"), regulation that doesn't limit them but does limit anyone who would cause them problems, and government that they can control.
The intellectual underpinnings of this were laid down in the 50s and 60s, the tools were sharpened in the 70s, your Great Crusade was launched in the 80s, and took on its present form in the 90s. If you're only noticing it now, just think back on the 20-40 years of excuses you've made for the radicalism that now has a firm grip on your party.
How did the Republican Party lose grip with reality? By ignoring reality, Mr. Frum. Just like you did.