Contrary to the current conventional wisdom, Clinton also had a philosophy of government. In short, it was the modernization of liberalism or - progressivism for a conservative country. Through innovative initiatives such as the EITC, welfare reform and Americorps, Clinton employed reformed governmental means for progressive ends. As the Moose can attest, by 1997, Republicans were frustrated that they had no means to counter this "Third Way."
Then came Monica and impeachment. Clinton lost all momentum and was forced to rely on the left of the party to defend against the forces of impeachment. Unlike Tony Blair, Clinton was not able to transform his party.
I think Bill Clinton did, to some extent, transform his party, but much of that transformation was dependant on the force of his own personality, and unlike Reagan Clinton's successor didn't win election and thus didn't have a chance to consolidate those changes. And even during the 2000 campaign, Gore seemed to run from Clinton's personality as much as he ran on the successes of Clinton's presidency.
The real question that both Whittman and Yglesias are getting at is whether or not Clinton left his party better off. My answer is that he left his party very well off for the future most of us imagined in January 2001, but not for the post-9/11 future. He left office with the Democratic Party prepared to do battle over the environment, over entitlements, and over abortion, but not over national security.
I guess Clinton assumed that things would continue as they were, that international terrorism would continue to be dealt with as essentially a police matter, and that the Democrats could continue to keep national security on the backburner. But given the intelligence he was privy to and the knowledge of the gathering al Qaeda threat, I don't think it's unreasonable to think that he might have taken more significant steps to gird the Democrats for eventual battle on the national security front.