Michael Medved does the best he can to make a logical argument. But then, his best is none too good.

When Reagan won the Presidency in 1980, crushing the incumbent Jimmy Carter 51% to 41%, he not only overcame a third party vanity race by a former Republican Congressman named John Anderson (his “Independent” Party drew 6.6% of the vote), but he also triumphed over by far the strongest Libertarian Party candidate in Presidential history.
Amazingly enough, Ed Clark, the Libertarian standard bearer, won almost a million votes (921,188) for 1.06% of the total.
To rational observers, a national campaign that wins only 1% of the vote looks pointless and pathetic, but by Libertarian standards the Clark campaign represented a veritable juggernaut, and the party’s breathtaking summit of achievement. Clark’s performance more than doubled all subsequent Libertarian nominees, even though some of them (like two time loser Harry Browne) raised and spent far more money for their sad little races. In terms of their percentage of the popular vote, Libertarian presidential candidates since the high-water mark of 1980 have drawn between 0.24% (David Bergland in 1984) and 0.5 (Harry Browne in his first race of 1996). Most recently, that burning hunk of unstoppable charisma Michael Bednarik earned a paltry 0.3% of the popular vote – less than one-third the showing that Ed Clark managed 24 years earlier.
The point isn’t merely that the Loser-tarian Party has moved decisively in the wrong direction (you don’t build majorities by losing two-thirds of your voters), it’s that they happened to succeed best against the finest conservative candidate in recent history.
In other words, the Libertarians lie or at least delude themselves when they claim that they will win votes by drawing people who are disillusioned with both big government Democrats and me-too Republicans. They drew more votes when running against the unequivocally conservative Ronald Reagan than they did against the likes of Bob Dole, either President Bush, or Gerald Ford for that matter.
Thus, the argument that they are pushing the Republican Party in a more conservative direction by taking away votes of die-hard conservatives is, like so much else about the Libertarian Party, a complete fraud.

Three facts the inexplicable Medved might want to consider:

1. Reagan had for years taken a strong "Government isn't the solution, government is the PROBLEM" line. He was not unequivocally conservative. I myself worked in the Reagan administration, for the Federal Trade Commission, precisely because he had strong libertarian sentiments in regulation and tax policy. These came to little, I agree, but Reagan was more complex than GW Bush, who is "unequivocally conservative," all right. And you can HAVE Mr. Bush; I don't want him anymore.

2. Reagan was running against JIMMY CARTER. This was Carter after the rabbit attack, after the flaccid reaction to the storming of our embassy in Tehran and the taking of hostages. That's not exactly the Dems' first team. And the Carter monetary policy and regulatory policy (Remember Michael Pertschuk?) had a big role in expanding the Libertarian vote. So, the reasons Clark did well were (1) He was a pretty good candidate, and (2) he was running against Carter, a "Let's Mate with the State!" guy from way back. Carter sent folks running to Reagan if they were gullible, and to Clark if they saw things clearly. That there are more gullible people than clear-thinking ones is not exactly front-page news.

3. In a dozen ways, "Loser-tarians" have already won. The CATO Institute, REASON mag, and a lot of other libertarian perspective are given respect and credence in DC policy debates and in the state houses.

Our candidates, perhaps, have not been competitive in national races, but that is just Duverger's Law in action. It's not as if any OTHER third party has made any inroads, either. The state-sponsored parties don't make it very easy. Imagine that Coke and Pepsi go to write their own antitrust laws; there wouldn't be any 7-Up on the shelves. "Shelf crowding, confuses the customers!"

And it may be true that Libertarians wouldn't be very good in office if we got there. But if we can reduce the power, scope, and intrusiveness of government by making persuasive arguments, who cares if we actually serve in office? The law, and lots of regulations, have come a long way toward what libertarians advocate in the last 25 years.