Judd Gregg's withdrawal isn't simply a testament to his own political cowardice. It also testified to the moral and intellectual collapse of the GOP. Gregg was denounced from within his own ranks for being a Judas ready to sell out his own convictions for commerce.
For President Obama this should serve as the final wake-up call about the illusory nature of his repeated calls for bipartisanship. Obama talked in his inaugural speech about meeting foreign powers with an unclenched fist. He didn't think that he was talking about the GOP as well, but it's slapped away his attempt at a handshake. The blunt fact is that he should never have tried to appoint Gregg in the first place. The notion that he can wave a magic wand and elicit cooperation from the GOP has been dispelled by events. In fact, the Gregg fiasco is going to further stiffen GOP opposition to Obama.
There might be cooperation in Congress from Republicans, but it's becoming increasingly clear that it can only occur after the 2010 election, when the GOP could face a rout. It's obvious that the past two elections have not yet dinned into the GOP's ears the fact that the electorate had repudiated its blinkered approach to taxes and spending and social issues. Perhaps it will take another landslide defeat for the GOP to recognize that simply opposing Obama without offering even a faintly plausible alternative is a recipe for electoral disaster. For now, it's going to wallow in the warm bath of its ideological purity.