I suppose it has something to do with the fact that taking over one of the two major parties from within is a good deal easier than starting or building a “third party” into a major party, but it seems to me that if Tea Party people really want a smaller, more frugal national government, they should be joining the Libertarian Party instead of the Republican Party. The Republicans have a solid track record of spending like drunken sailors when they are in power. And progressive Democrats should be forming a "Progressive Party" or supporting the Green Party, instead of voting for a party that couldn’t even bring a public option for health care (or meaningful legislation on energy) to a vote, despite the fact they controlled both houses of Congress and the White House.
If both Tea Partiers and Progressives abandoned the Democratic and Republican parties, these “major” parties would both be much smaller. Perhaps they would join forces to form an (allegedly) “moderate” party of some sort. Or if truth in advertising still has any meaning in the festering swamp that is our political system (I can’t see any evidence that it does), they could rename themselves the “Corporate Party.”
To achieve their respective aims, while building the Libertarian and Progressive parties into major players, Tea Party types and progressives could identify and support candidates from the Republican and Democratic parties who seem to be more or less in harmony with their basic objectives and support them selectively, while running and/or supporting candidates of their own in races where there is no major party candidate they can vote for without holding their noses.
I have always voted for third party candidates (usually Libertarian) whenever I felt that the outcome of the election for a particular office was already decided, or didn’t really matter. In close races I vote for the major party candidate (usually, but not exclusively the Democrat) who seems most in line with my position on the issues of the day. I usually end up feeling like I have chosen the “lesser of two evils.” I’m getting tired of doing that.