I do not think it is the issue of leadership or at least leadership alone. It is the question of the majoritarian system that favors the lowest common denominator approach to public policy and effectively excludes minority interest representation. That put the Dems in a very difficult position - on the one hand they need to represent the smorgasboard of often conflicting "minority" interests (enviros,organized labor, feminists, urban liberals, Blacks, gays, not-so-well-off-seniors etc.) but on the other hand they must not alienate too much other "minority interest groups (white males, suburbanites, blue collar workers, fair weather liberals, small business owners, better-off-seniors, etc.) and of course - corporate interests. So they try to walk a fine line that makes them look like Republicans light.
People tend to vote on issues that concern them personally - rather than on "save-the-world" ones. It is so, because people are more concerned about being mugged, or loosing a job, than, say, about land mines in Afghanistan or the effects of global warming on European agriculture. Republicans have been very successful in tying their narrow pro-business agenda to those issues of personal concen (security, quality of life, economic prosperity etc.) - the only personal concern issue that they did not exploit so well was reproductive freedom. The Republican position on abortion turned many urbanites and women off - providing a good persoanl reason for going Democrat. But once Repugs work that issue out and develop a position that is acceptable (or at least not offensive to women and urban liberals) - there will be very little that these groups would gain from supporting Dems.
Since the Dem's inability to espouse popular issues of concern to "minority interst" is more systemic (majoritarian regime, power of corporate intersts) rather than personal (such lack of leadership of vision) - it seems that further erosion of the democratic political clout is imminent.
Wojtek