As I have said before, liberals usually suffer from this affliction where at the slightest opposition, they suddenly turn into the political Cowardly Lion and play dead. It's just not that though, the people who lead the party, while well meaning, are often from parts of the country where the constituency is hard to the left. Republican success has been that they can get people from the center all the way to the far right to vote for them almost every single election because they know that they can have more moderate leaders and still get the support of their fringe groups. Democrats are capable of figuring that out every once in awhile but then turn around and blow it because once in control, they run with an agenda that gets torpedoed through a combination of their own amazing incompetence and the inability to effectively counter the resistance and misrepresentation from the opposition.
While Nancy Pelosi is probably a very nice person, she's not the best person to lead Democrats in the House. She comes from a district that could probably be considered one of, if not the most liberal in the country and that just doesn't connect well with with more moderate voters, especially independents, across the rest of the country. (On a side note,go to San Francisco and read some of their alternative paper columnists, they think she's not liberal enough.) As a result, she's managed to become a favorite target for Republicans to use as a representation of the Democrat party, and they've been very successful with this. I suppose the only thing that could make it better for them is if she was a lesbian and/or black.
The other problem is that while well meaning, health care reform, cap and trade and other issues they had on the agenda were bungled and weren't the most pressing things that needed to be done. Say what you will, the bailout of GM saved hundreds of thousands of jobs. While vilified at the time as an example of "socialism taking over private enterprise", it has proved to be a success and the company is now turning a profit instead of massive losses. Health care reform went too far in some areas and not far enough in others but still managed to piss everyone off. Cap and trade was doomed from the start because of the massive opposition from the well financed energy lobbyists and their PR machines. Instead of coming up with a common sense solution to any of these issues, Democrats went with an agenda that was too radical in it's changes, then made concessions to every single naysayer to get the legislation to the floor. These ended up being voted against anyhow by alot of the people who they made concessions to and so, the uncanny ability of Democrats to self destruct once again came through without failure.
That's where the Republicans almost always win, they don't compromise and they sure as hell have no problems squashing the dissent within their own party. Look at the votes in the 111th Congress, almost without fail, only a couple Republicans will cross the aisle while dozens of Democrats will do the same. Progressives are more like a highschool kid who just wants to be popular and gives in to anything, just to make friends, only to find that no one respects them because they end up standing for nothing.