With the right united, and the NDP anchoring the left, where are the Liberals to go? The Chretien era was relatively easy for the Liberals since they really had no viable opposition - the right was fractured and the NDP never had enough votes to gain power. Dion was an experimentation in bringing the party to its far left base, with an eco-carbon tax agenda that would make the Sierra Club proud.
Now Iggy's trying to bring the party back to the right and the left isn't liking it. The outcry over Iggy's support of the Tory crime bill is mounting. These are dangerous times for the Liberals. Attempts to move to the right may cause a loss of votes to the NDP, since Harper has been governing for awhile and the "anybody but scary Harper" meme that the Liberal's leveraged to gain NDP strategic voting will be far less effective. Meanwhile, right leaning voters may have already picked their horse in this race.
Iggy seems to be left with trying to be all things to all people. This may work in the very short term, but eventually people start to notice when your positions change with the days of the week and your ideology swings like a pendulum.
In the long run, trying to be all things to all people results in one being nothing to everyone.