So how should we understand what's happening?
I'll start with what is certainly not happening. Via Ambinder, we have Peter Daou despairing of the Obama administration's folly and citing Zandar, for whom:
The GOP...is treating this fight as what it is: an existential battle. They know that if robust health care reform passes, they are beyond toast. Democrats will run the show for a generation (his emphasis).
This -- the flip side of Senator Jim DeMint's "Waterloo" remark -- is totally wrong. This is not an "existential battle." Neither Democrats nor Republicans are going anywhere. No one runs the show for a generation, if that means twenty years. On the other side, if health care fails it won't mean the end of the road for Obama; if Bill Clinton could thrive after his health care debacle, Obama is certainly capable of rebounding if he loses this one.
Yes, the outcome on health care may have electoral consequences. If the bill passes and the program turns out to be popular (something, by the way, that Republicans seem to be conceding in their rhetoric!), it may well help Democrats in the short term. Or, perhaps, not. Older Americans are perfectly capable of voting Republican while still supporting Social Security and Medicare. The electoral consequences are certainly smaller and a lot less predictable than this kind of hype would indicate. Meanwhile, the outcome on health care likely will affect Obama's future ability to persuade other actors to follow his lead, but that's also an incremental, and reversible, effect. Nothing existential; no Waterloos.
That's not to say that nothing is at stake, however. The outcome on health care does matter to a lot of individual people and organized interests, so next I'll talk about why and how the Battle of the Town Halls does matter.