If the right never wins, they move further left to collect more centrist votes. If the right moves more left, the left moves more left to differentiate themselves and appeal to the more progressive crowd that might otherwise vote green party or some other third party.

This has actually been happening for the last few decades but in the other direction. Left leaning voters not turning out for elections, partially because Dems have a history of suppressing exciting progressive candidates meant that Dems sought more centrists to compete with the right. Particularly after 5 of the 6 presidential elections went to Republicans between the late 60s and late 80s So they moved further right as a result. Both Clinton's, Obama and Biden are not progressive, they're barely left of center. The Democrat Party actively discourages progressivism, particularly in presidential candidates, to make them feel "safe" and "reasonable" to centrists. That shift to the right meant that the right has had to appeal more to the relative eccentrics on the right like anarcho-capitalist libertarians, the Christian nationalists, and the white nationalists. And not just at a presidential level but on every level even down to school boards. Thus our current status quo.

Not that Nixon, Reagan, or the Bushes were at all good people, but at the very least they didn't feel comfortable publically and openly appealing to bigotry and the dismantling of the federal government as a campaign tactic. That is no longer the case with the modern GOP.

To move the Overton window.

As we see with the Republicans eating themselves, there will always be opportunists looking to take down their own and fill the Gap. But we can use that to our advantage to get the legislation we actually want. But we kind of have to take care of the crazies before we can 100% focus on fixing our house.