Progressives in the Democratic Party are faced with a serious dilemma. While it is clear that at least the majority of elected Democrats in Congress are progressives, the Blue Dog/DLC wing is more than willing to sabotage any progressive change by siding with the Republicans on all issues that have to do with money: health care insurance reform, war, the nature of any economic stimulus, Wall Street bailouts, trade, privatizing government functions to reward cronies, and after giving away the store to corporate America, claiming that spending on education, health care, social security and the like are breaking our budget (not the corporate welfare of defense spending and now direct cash surrenders to Wall Street).
Compounding this problem is that though progressives seem to be a majority of Democrats, the leadership of the Senate is not, and the leadership of the House, while nominally progressive, seems to follow their lead in many priorities.
The fact that corporate owned politicians are the functional majority even while the Democratic Party (which we wrongly assume means progressive) is the majority on paper partly explains some of the worst and otherwise inexplicable actions of the Democrats like compromising more than half way on any legislation BEFORE THEY EVEN INTRODUCE IT, which inevitably leads to negotiating a halfway okay policy down to nothing. For example, the public option was a compromise to begin with. If Congress was really interested in providing the most cost effective option, they would have started with single payer and negotiated down to a public OPTION.
They must do this because though progressives are the majority of Democrats, the DLC/Blue Dogs do not care about the success of progressive goals or even the Democratic Party--they care about who's writing the checks, now as donations and later as their employers.
In the 90s, the Republicans purged their ranks of those who wouldn't reliably vote for certain core principles. While that led to horrible policy when they were in power, if someone voted for them, they could at least know that certain things were going to happen: taxes for the rich and corporations would be lowered, businesses would be deregulated, wars would be started.
What does anyone expect when the Democrats win? That essentially the same foreign and economic policies will be pursued with a friendlier face, and maybe some modest social programs will be implemented to salve the pain of deindustrialization and outsourcing our jobs, and the maimed veterans of the corporate wars will actually get the care and benefits they were promised?
So one temptation is to try the purge, take over the party structure, favor more progressive candidates in primaries, etc. There are a couple of problems with this: the corporate candidates will always have the money and friendlier media coverage. Another is that the purge in the GOP was from less reliably corporate to MORE reliably corporate, so the money and power was on the side of the purge. That all of the replacements parrot a religious right line as well is simply a matter of sticking to a marketing strategy that worked for a couple of decades (they are probably frantically pitching new images to focus groups, like their Ayn Rand, selfish superman one). Our purge would not be guaranteed success.
A surge out the door of the party to form a new party, possibly combining with some of the smaller progressive parties of the left like the Greens, would have it's own set of problems. One is that some progressives would stay in the Democratic Pary out of inertia. Another is where the corporatist Democrats would go--to the GOP. They would not tolerate being in a powerless micro-minority party. That is not what they are paid to do. Even if a similar schism occurred in the GOP, with the teabagger know-nothings leaving the corporatists, creating a three or even four party system, the gullibility of the teabaggers shows that they will be swayed into alliances with the corporatists most of the time if a policy can be sold with fear, racism, get-rich-quick, anti-intellectual, or violent themes. And of course the corporate Dems, whether in a rump Democratic Party or as Republicans would vote with them as well, leaving us about where we are now.
I think I laid out the negatives of both options, and would definitely like to hear the problems with that analysis.