This ought to be their moment. They have been right on so many issues – and they still are. They are stronger in many ways than they have ever been. Yet the Liberal Democrats will gather for their conference in Bournemouth at the end of next week suspecting that, yet again, it is probably not to be. As Ted Kennedy might have put it, the dream goes on. But that's the problem. It's still only a dream.

What aren't the Lib Dems doing better? It is a really important question, and it is important not just for the party itself. For an honest answer also surely goes to the heart of the already interminable debate about the future of self-described progressive politics in this country. And it even, perhaps, tells us something fundamental about the people and country we are.

By so many yardsticks, the Lib Dems deserve to be higher in the polls than they are. Michael Meadowcroft, intermittent party loyalist and former MP for Leeds West, listed several of them in a typically forceful Guardian letter today: the economy, Europe, ID cards, Iraq and localism. On all of them, as he says, the Lib Dems have been consistently right. One can add others to the list that Meadowcroft omitted: climate change, police powers, tax, electoral reform. All big subjects on which the Lib Dems have been right most of the time in ways that put the other parties to shame.

Why look any further, Meadowcroft asks? Many agree with him. But not enough do, and that's the bigger point. Yes, I can already feel the indignant emails winging their way towards me. Haven't you seen the latest ComRes poll in the Independent this week, Martin? The one that puts them on 21%, up three points in a month and now only three adrift of Labour, making it the party's best standing in any poll for some weeks. Doesn't that disprove all that metropolitan Guardian fatalism?

Well it doesn't disprove mine, I'm afraid. In the first place, that was just one poll. The other eight polls over the last month have the Lib Dems between 17% and 19%. So let's wait and see the next few before yet another claim of yet another Lib Dem breakthrough. More importantly though, even 21% isn't good enough for a situation like this, in which the governing party is getting pummelled and there are big doubts about their main opponents. This ought to be a perfect storm for the two main parties, with the Lib Dems reaping the reward. Instead it's just typical British political weather, cloudy with occasional sunshine and showers.

And it isn't as though the Lib Dems aren't making their mark. Yes, I know that the system is biased against them and that the media don't give them a fair shout. I agree with a lot of those complaints. But you can't seriously pretend that Vince Cable hasn't managed to get his voice heard throughout the financial crisis. I heard Cable cheered to the echo at the Hay festival a few months ago. The marquee was full to bursting with people who would have followed him over any barricade that Vince cared to nominate. Most people, though, aren't like that.

That's not just my opinion. It's a fact, though an unwelcome one. Look at the real votes that real people have been casting in real elections in the last few months. The Lib Dem performance in the June local elections, held mainly in areas where the party polls well, was reasonable: 25%. But the European elections, held nationwide on the same day, were terrible: 14%. Moreover, the Lib Dems have lost the art of winning byelections. They should have won Henley in 2008. Since Henley, their vote has gone down every time – including Norwich North, another seat they would have won in earlier times.

Optimistic Lib Dems – are there any other kind? – should look carefully at that byelection result just seven weeks ago. In Norwich North, the Lib Dems didn't just fail to win. They weren't just edged out by the Tories. Their vote actually went down, both in absolute terms and as a share of the poll. Every other challenger party increased its share. It was an absolutely terrible result for a party that always fancies its chances in byelections against an unpopular government.

So why are the Lib Dems not doing better? The first answer can be put in two words: David and Cameron. Cameron's election as Tory leader in late 2005 was a watershed for the Lib Dems. Before Cameron – BC – they were most voters' default second choice. After Dave – AD – they weren't. A liberal Tory leader – and Cameron is, whatever anyone says – has stopped the long-familiar Tory-to-Lib Dem swing vote in its tracks.

The second answer, though, is that the Lib Dems have become part of the establishment. For decades they have prospered as the anti-politics party, running against the system, apostles of new politics. Now, particularly after the expenses scandal, they have woken up to discover that they are seen as part of the problem. The cosy two-party system is suddenly the cosy three-party system, and the Lib Dems are a cosy part of it. Meanwhile, other small parties have seized the ground the Lib Dems once thought to rule unchallenged. If you want to vote against the establishment, you can now vote Green or Red or Ukip or even BNP. Look at Norwich North or the European elections. Doubtless it's all very unfair. But it's also true.

However the third answer is that Britain may not, after all, be as liberal a society as many of us would like, and sometimes pretend. I don't think there is any doubt that the Lib Dems stand for liberal values and that the voters understand this. It is silly to pretend that Nick Clegg is in any significant way more or less liberal than Ming Campbell, Charles Kennedy or any of their predecessors. The truth is simply that most Tory and Labour voters are not instinctively liberals.

Being liberal, the writer turned politician Michael Ignatieff said in a lecture in London in July, is a habit of the heart. A liberal has a generous heart and an open mind. A liberal puts freedom first, is optimistic about human nature but sceptical about power. Ignatieff's definitions seem about right to me. But I do not think a majority of people share them, and certainly not in either the Tory or the Labour party. Yes, there is a liberal tradition in both of those parties. But, no, it is not a very strong one. The Lib Dems are not natural bedfellows for either of them – though this won't stop lots of people speculating about how it might happen. In the end, the reason the Lib Dems are not doing better is simple. Not enough other people are liberals.