Here's why President Bush is in trouble but Democrats won't be able to capitalize on it (this is from the perspective of one person who supported Bush and wrote editorials endorsing him; it does not purport to speak for any other person or group):
The most important issue facing the United States is the war on terror. That was true during the presidential election, and it is true today. John Kerry simply was not serious about that challenge; he could only pretend to be, starting with that silly little salute at the Democratic convention. Conservatives had no illusions about George Bush as a fiscally responsible steward of the federal government and had serious reservations about what his domestic agenda might be. But he understood the nature of the threat facing this nation and seemed prepared to do whatever it took to meet it.
And it is in fighting the war on terror that many Bush supporters are having doubts these days. Whatever the justification for fighting in Iraq, however connected it might be to the larger war, we are bogged down there now. The objection is not that we are there but that we might not be serious about it; there is the fear that it is another Vietnam in the sense that we are not doing enough to finish what we started. Our border with Mexico is wide open, and the administration does not seem committed to closing it, no matter who can get in. Homeland security has become just another pork-laden fiasco. After Hurricane Katrina, Bush's response was too little, too late (even taking into account that the major failures were local and state). And having been raked over the coals for having an incompetent crony at FEMA (even worse, a friend of a friend), he names Harriet Miers to fill Sandra Day O'Connor's Supreme Court seat. There is a fine line between someone who is decisive and does what needs to be done and someone who lives only in his own head no matter how ambient circumstances change. George Bush, today, does not still seem like someone with a firm grasp of the terror threat and a coherent plan to deal with it. I certainly would like to be convinced otherwise.
But Bush is not running for re-election. I can't name a single Democrat today who has any more clue about the terror threat than John Kerry did. Never mind asking them what they would do instead of Iraq to fight terror and watching them sputter. They're scared to death of even talking about Iraq. And if Bush has been even worse than we thought on domestic policy -- expanding the federal reach and spending grotesquely -- certainly nobody believes a Democrat would be any better.
The Democrats' problem, then, is that they have no strengths to offset Bush's weaknesses. His weaknesses are their weaknesses. Until and unless somebody comes up with something better than "Bush is evil," the Democrats have no better chance of winning the presidency than they did in 2004.
And there is this: The Harriet Miers' nomination was probably the last straw for many in the GOP's base. That greatly diminishes the chances of a Rudy Giuliani or John McCain to finesse their moderateness in the early primaries. The voters will want the real deal or nothing at all. That means a greater likelihood of a true conservative as the Republican nominee.