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Arnold defines himself as libertarian - and he's doing quite well in the polls. Obviously much can be attributed to his fame as opposed to positions at this point - but in California especially the thought of retaining our liberal social positions but taking a more conservative approach to our financial issues after Davis wrecked it with overspending is appealing.
Anyways, you can still find libertarians in the other political camps. And they aren't necessarily without popularity. However if you're speaking purely of a third party as opposed to actual political leanings, then yes, libertarians definitely are not going to be getting very far in this country.
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"Convictions are more dangerous enemies of truth then lies." - Nietzsche
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