No, you haven't overstated the importance of this election in the least. Republicans (other than Goth) are freaking out. This means that the path they are on is a losing path.
It's easy for the Young Turks of the Republican party to look "fiscally conservative" when they're cutting public television and NPR. Not enough voters care about those things to affect elections.
But when they start to cut social programs and "entitlements," they start to find out what every other politician has known since Ancient Greece: that if you stop spending money on people, they stop voting for you.
Paul Ryan even laid some of the blame on Newt Gingrich, who two weeks ago called the Ryan plan "right-wing social engineering" and has had to spend the week since then apologizing and "walking back" his remark. Republican politicians and pundits immediately jumped on him and said he was a traitor, but Republican voters (again, except Goth) said, "Hmm...you know what? Newt's right."
So the GOP is now realizing that when Gingrich helped convince all those upstate Republicans to to vote for the Democrat. And all the Democrats have to do is keep repeating it.