For Ron Paul's most ardent supporters, last night's third-place finish in the Iowa caucus was an undeniable disappointment. The dream of boomeranging from an Iowa victory to a New Hampshire resurgence to an anything-is-possible Super Tuesday has now gone to re-write.

Being exposed as a state front-runner for three tantalizing weeks proved about two weeks too long, as the media and Paul's competitors hammered away at his foreign policy views, his support among and alignment with non-Republicans, and his foul old newsletters. Exit polling showed clearly that late-breaking voters broke hard away from Ron Paul.

But Paul fans and supporters of limited government more broadly have many reasons to be cheered by last night's results. Here are seven:

1) Paul more than doubled his vote over 2008, while Mitt Romney's stayed exactly the same. Seriously, Romney got 30,000 votes (25 percent of the total) in 2008, then 30,000 votes (25 percent of the total) in 2012. Paul vaulted from 10 percent to 21, from 12,000 votes to 26,000. His message of freedom, limited government, attacking the Federal Reserve, and ending wars foreign and domestic is undeniably on the grow.

2) Paul's delegate- and caucus-focused strategy means that he will likely punch above his electoral weight. The campaign focused not just on doing well at the caucus, but making sure Paul-friendly humans get nominated as county delegates, so that when the 25-delegate pie is eventually divvied up Dr. No will get more than projected.

Paul has a nationwide focus on caucus states, which are more susceptible to concerted applications of supporter enthusiasm. As The Wall Street Journal observes, "If he is able to win a plurality of just five delegations from any of the 50 states, Washington, D.C., or the five territories, Mr. Paul can vie for the nomination at the Republican convention in Tampa, Fla. That would allow him a seat at the table when the party decides its platform, giving him leverage to push his antiwar and antitax message."

3) Barring an unexpected and popular new Republican entrant, Paul is virtually guaranteed of making the Final Four once more. Last time around, Paul finished fifth in Iowa and fifth in New Hampshire, on the way to an overall fourth-place showing in the delegate count. This time Paul finished third in Iowa, and is polling at second in New Hampshire. With Rick Perry and Michele Bachmann inching toward the exits, and barring some Jon Huntsman Hail Mary, that leaves just three main competitors left: Romney, Rick Santorum, and Newt Gingrich.

4) Newt Gingrich is on the ropes. The Final Four could become Los Tres Amigos in a hurry. Iowa exit polls show no clear rationale for Gingrich's candidacy—there was no measurable subsection of voters who preferred him over other candidates. Not Tea Party supporters, not Tea Party haters, not the uneducated poor, not the overeducated rich. Even those who believe that "working in government" is a better presidential qualification than "working in business" had Gingrich in third place, behind Santorum and Paul.

Nate Silver's respected FiveThirtyEight blog has Gingrich projected for a distant fourth-place finish in New Hampshire, behind Huntsman, and that was before the Newt's disappointing finish in Iowa. All evidence points to Gingrich spending his final days going full metal nasty on Romney, subjecting the former Massachusetts governor to treatment he miraculously avoided in Iowa. Paul stands to benefit.

5) Rick Santorum has a target on his back, history against him, and no real national campaign. The former Pennsylvania senator bet the farm on Iowa and peaked at the right time. And those aren't the only things he has in common with Mike Huckabee.

Get ready for a solid week of media spelunking through a Santorum archive rich with quotes like "[I]f the Supreme Court says that you have the right to consensual sex within your home, then you have the right to bigamy, you have the right to polygamy, you have the right to incest, you have the right to adultery," and "If Darwin is right, I have organized my life around an illusion. We have no moral demands if we are evolved." A full 13 percent of Iowans identified abortion as their number-one public policy issue; among those Santorum got a colossal 58 percent of the vote. It's hard to imagine that formula working nationwide, particularly since Santorum doesn't particularly have a nationwide campaign.

Iowa gave 34 percent to Mike Huckabee in 2008, 31 percent to Steve Forbes in 2000, 23 percent to Pat Buchanan in 1996, and 25 percent to Pat Robertson in 1988. Alan Keyes once pulled 14 percent there, for heaven's sake. These are interesting results, ones that had the benefit of winnowing the competition, but they did not scale. Santorum is the social-con candidate, and with his uber-hawkish foreign policy he may end up with a fair amount of neo-con support, but the country is moving away from, not towards, those directions.

6) Mitt Romney has a John McCain problem. No, it's not that the GOP's 2008 nominee is now endorsing his former rival, but rather that both men have an icy relationship at best with the Republican grassroots and Tea Party movement. As conservative commentator Dana Loesch Tweeted in the wee hours, "To rephrase, the guy who cosponsored a bill to restrict ur speech will endorse a guy behind the original idea to restrict your healthcare."

There has been plenty of (understandable) talk about Ron Paul's "ceiling" of potential support, but it is entirely possible that Romney faces a ceiling of his own (one that we will be hearing a lot about in the coming month) among Tea Party enthusiasts, ObamaCare opponents, libertarians, Evangelicals, and others. The exit polls here are telling: Romney's single-highest percentage share (48 percent) of the vote came from two overlapping camps: Those who have a "somewhat negative" view of the Tea Party, and those for whom electability is the most important issue. Romney also had the highest score (29 percent) among those who confessed to having "reservations" about their candidate.

Where did Romney do the worst? Among people whose primary motivation was backing a "true conservative" (1 percent, compared to Ron Paul's field-leading 37 percent). Among born-again or Evangelical Christians, Romney tied for a distant third, at 14 percent. People who "strongly support" the Tea Party movement had him tied for fourth (also at 14 percent). There are some positive signs there for Romney—particularly that he won among voters (33 percent to Paul's 20) for whom the economy is the most important issue. But the moment he stops looking electable is the moment his candidacy could face collapse.

7) Ron Paul, and more importantly his ideas, are in it for the long haul. Other candidates will run out of money; Ron Paul won't. Most politicians see their business in primarily transactional terms of winning, losing, and influencing legislation; Paul sees his as proselytizing for freedom. "Where we are very successful," he said his speech last night, "is re-introducing some ideas the Republicans needed for a long time, and that is the conviction that freedom is popular."

Presidential campaigns, for all their soul-killing dreariness, are opportunities to debate political philosophy and policy with a motivated audience. The Paul campaign, simply by virtue of surviving the fates suffered by Herman Cain, Tim Pawlenty, and a dozen other pretenders to the throne, has occasioned all sorts of fascinating (and oftentimes brutal) discussion about, against, and within libertarianism.

Even if you disagree strongly with some of what Paul says (as I do), or even actively root against him (as I don't), the fact is, for those of us who prefer a smaller government, for the first time in memory we have an upper-tier major-party presidential candidate opening up conversations about cutting government by $1 trillion next year, making the beyond-rhetoric case for freedom, and delivering such long-overdue critiques as: "Too often, those who preach limited government and small government, they forget that invasion of your privacy is BIG government."

You can't win or even influence political arguments if no one is listening. Paul's finish last night, disappointing as it was for many who got their hopes up, nonetheless ensures that people will be listening for many months to come.

Matt Welch is editor in chief of Reason magazine, and co-author (with Nick Gillespie) of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America (PublicAffairs).