Upton Sinclair once said "Americans will take socialism, but not the title." Nearly a century later, that principle remains basically intact. The right's war on meaningful language has long since passed "socialism" and moved on to "liberal" as the epithet du jour (although the "s" word is still brought out from time to time as the ultimate curse of the underworld, such as Richard Viguerie slurring Huckabee as a "Christian socialist."). Joe Public probably has a lot of liberal-to-left opinions but only has a faint understanding of what those words mean. Whatever a "liberal" is, he's sure he doesn't want to be one. The Pew survey here contributes to this problem by using these terms that have been irreparably corrupted by decades of right-wing propaganda.
But Yglesias hits upon a more important point. This crude, single-axis graph is predominantly an accurate depiction of the field's social and cultural views only. Hence Giuliani, who has surrounded himself with all the Neocon Nutjobs he can find, but is seen as the most "liberal" GOP candidate. The erstwhile ruling-class lament that the public votes with its wallet in mind has been seriously damaged if not destroyed, and, at the very least, they have removed themselves from the spectrum through which the public views politics. The exclusion of Edwards is particularly unfortunate for this reason; as he's likely seen as the most culturally conservative of the three Dems, but by far the most populist. His inclusion to the right of Clinton and Obama would have made this nearly irrefutable.
This graph does become more accurate as long as you concede that cultural values are all its really measuring. The American public is, I think, indisputably more conservative than average on those issues. What we aren't going to get, of course, is any concession from the press or mainstream pundits that the stalwart terms "liberal" and "conservative" have no meaning to the mass public beyond the social/cultural sphere (to the extent they represent anything substantive beyond buzzwords). But that's rather the point, isn't it?
