Okay, I must ask a counter question.
Why can't the Democrats utilize populism to push more left wing economics, while being more socially conservative to assure those groups? I understand why people wanted to go rightwards on social issues, but economics? That's... just a bit different.
The crucial element here is what are the goals of the Democratic Party? I would argue that one central goal is an America where everyone has a fair shot at the American Dream. You can call this equality of opportunity, though that's a weighted term. The point is, one of the constant elements of the Democrats have been that they support policies that increase economic mobility and fairness. Bill Clinton, Jesse Jackson, Al Gore, Dennis Kucinich. They're all pretty much on the same page. The big difference is how do you get there? From 1933 to 1992, the Democratic Party generally subscribed to the orthodoxy of the New Deal. The basic belief was that the federal government, through the use of regulation and "welfare" (broad term) programs, should be used to promote economic mobility. The Third Way subscribes to the belief that big government is not always the most effective means of addressing these issues. Local and statewide governments often understand the concerns and needs of their constituents better than a federal bureaucrat. The Third Way also sees business and private enterprise as an ally in addressing poverty and economic growth. So while the goals haven't changed, the methods have.
The problem with the Democratic Party becoming a socially conservative party is that it goes against many of the core principals of the Party. Being pro-growth and pro-free market does not. Yes, there will always be social conservatives in the Democratic Party. But suggesting that they become dominant is both unlikely and potentially dangerous for the stability of the Party. I would also argue that populism has little basis in mainstream economic theory and is more about political pandering than smart policy.