In fact, based on the combination of his personal views and policy positions, Paul may not be the marginal candidate many assume him to be. With the exception of hardcore neoconservatives for whom an aggressive foreign policy is paramount - a viewpoint in disrepute after the failures of the Bush era - Paul has something to offer most of the other constituencies within the Republican party. His hands-off policies appeal to many social conservatives as well as libertarians. His clear personal religious faith attracts religious conservatives. His fiscally conservative policies appeal to both those who want government reform and to pro-business Republicans. In addition, the latest FoxNews poll shows asked voters who was the "true conservative" in the race and 40% answered Paul while 34% answered Santorum. Clearly Paul has created a larger niche as both the most Conservative and most Libertarian candidate in the race.
In Iowa Romney got almost none of the conservative vote while Santorum ended up sharing the conservative vote with Paul. But unlike Paul, Santorum has very little money and even less appeal to voters outside of that hardcore conservative base. Santorum polls very poorly in New Hampshire and without money he lacks the legs to catch up with other candidates. As Santorum's Iowa surge fades, it's quite likely that many of his supporters - who may be "anyone but Mitt" voters - will move to Paul with whom he shares conservative common ground.
If it proves to be true that Paul has two bases of support within the Republican Party, winning over both serious conservatives and libertarians, that puts him in position to be the preeminent challenger to Romney's broad but lukewarm appeal. Though the media may continue to argue that Paul is unelectable, with this clear evidence that his base of support is much broader than originally believed, this may come down to a very close two-man race between Romney and Paul.