You guys are arguing 2 different aspects of conservatives that aren't necessarily related. Fiscal and Social agendas. I think most "conservatives" would align that way based on fiscal policy. So smaller government, less government spending and control. This does not mean that most support anti-social agendas. Just think we should avoid lumping people into 2 categories of staunch or caring...
This is absolutely true. Social conservatives are shrinking and dying; within 30 years I think most of that movement will have literally died off. People in my generation are not interested in social conservatism. We grew up in an integrated world and we had access to the internet--we understand, perhaps better than any other group of people in human history, that we have little to fear from people who are different.
Conservatives need to understand that they are alienating this next generation of people when they fight for social conservatism. Fiscal conservatism is very popular--I know lots of people who agree with the Republican party's economic agenda, etc. But they are unwilling to vote for Republicans because of their social policies. A lot of my straight friends, for example, despise the Republicans because of their stance on gay rights. Thinking it's acceptable to turn you back on 10% of the population is moronic because almost everyone else in the population knows and cares about a gay person.
In the future I think we will have a party that blends economic conservatism with social liberalism, and this will be the dominant party. Whether it's going to be a new party or a recasting of one of the old ones I'm not sure, but I do think that's the future.