I don't have much sympathy for Mike Castle, though I do regret his defeat. If you are going to have a chance as a moderate Republican in this environment you need to find a some high salience positions that get strong support from conservatives and enough support from nonconservatives so that you have majority support and push those issues really hard. That is what Susan Collins did in 2008 with card check and what Scott Brown did in 2010 with Obamacare, tax cuts, and civilian trials for terrorists. Check out Castle's website to get an idea of how badly he miscalculated the environment. In fact, I'm thinking maybe we are better off with O'Donnell.
Actually not really. There is a fairly narrow band of issues (where public opinion is ambiguous) where, because we will probably have a liberal Democrat rather than a (very) moderate Republican Senator, it is marginally more likely that liberal initiatives will be passed and conservative initiatives blocked. I don't know how many such issues there will be, but Obamacare only passed the filibuster threshold by one vote.