Paul Krugman says there's no reason to shed any tears over Reagan's lost legacy:

As the Bush administration sinks deeper into its multiple quagmires, the personality cult the G.O.P. once built around President Bush has given way to nostalgia for the good old days. The current cover of Time magazine shows a weeping Ronald Reagan, and declares that Republicans “need to reclaim the Reagan legacy.”
But Republicans shouldn’t cry for Ronald Reagan; the truth is, he never left them. There’s no need to reclaim the Reagan legacy: Mr. Bush is what Mr. Reagan would have been given the opportunity.
In 1993 Jonathan Cohn ... published an article in The American Prospect describing the dire state of the federal government. Changing just a few words ... makes it read as if it were written in 2007.
Thus, Mr. Cohn described how the Interior Department had been packed with opponents of environmental protection, who “presided over a massive sell-off of federal lands...” that “deprived the department of several billion dollars in annual revenue.” Oil leases, anyone?
Meanwhile, privatization had run amok, because “the ranks of public officials necessary to supervise contractors have been so thinned... Agencies have been left with the worst of both worlds — demoralized and disorganized public officials and unaccountable private contractors.” Holy Halliburton!
Not mentioned..., but equally reminiscent of current events, was the state of the Justice Department under Ed Meese, a man who gives Alberto Gonzales and John Mitchell serious competition for the title of worst attorney general ever. The politicization of Justice got so bad that in 1988 six senior officials, all Republicans, ... resigned in protest.
Why is there such a strong family resemblance...? Mr. Reagan’s administration, like Mr. Bush’s, was run by movement conservatives... And both cronyism and abuse of power are part of the movement conservative package.
In part this is because people whose ideology says that government is always the problem, never the solution, see no point in governing well. So they use political power to reward their friends, rather than find people who will actually do their jobs.
If expertise is irrelevant, who gets the jobs? No problem: the interlocking, lavishly financed institutions of movement conservatism, which range from K Street to Fox News, create a vast class of apparatchiks who can be counted on to be “loyal Bushies.” ...
Still, Mr. Reagan’s misgovernment never went as far as Mr. Bush’s. As a result, he managed to leave office with an approval rating about as high as ... Bill Clinton... But the key to Reagan’s relative success, I believe, is that he was lucky in his limitations.
Unlike Mr. Bush, Mr. Reagan never controlled both houses of Congress — and the pre-Gingrich Republican Party still contained moderates who imposed limits on his ability to govern badly. Also, there was no Reagan-era equivalent of the rush, after 9/11, to give the Bush administration whatever it wanted in the name of fighting terrorism.
Mr. Reagan may even have been helped, perversely, by the fact that in the 1980s there were still two superpowers. This helped prevent the hubris, the delusions of grandeur, that led the Bush administration to believe that a splendid little war in Iraq was just the thing to secure its position.
But what this tells us is that Mr. Bush, not Mr. Reagan, is the true representative of what modern conservatism is all about. And it’s the movement, not just one man, that has failed.