He was derailed, because now anyone from any party is allowed to play the victim card.
He was derailed because he drew a line in the sand, and ultimately wasn't able to build any kind of consensus. It's poor leadership. Reagan was as partisan as they come, but he didn't draw a line in the sand about everything. He knew when to hold a gun to people's heads, and when to invite the enemy into his tent for counsel. Consequently, when he did draw a line in the sand, it meant something.
Of course he did some things right. You can say that about any President, even Grant or Taft.
But he did so many things wrong, that no amount of success in Iraq will ever redeem his legacy to the extent that he's considered a great President.