I'm sorry, he would not hold Southern states and he would have a hard time pulling in blue dog Democrats. Rudy is pro-abort and anti-gun. That is a lethal combination for a GOP nominee. It means that person will not hold the base and will not attract Reagan Dems. And Rudy cannot run leftwards for more votes on a pro-war stance. He is boxed in by his past. The GOP would be suicidal to climb in that box with him.
Other than one aberrant poll result in Arkansas and close polls in Florida, Giuliani is solidly ahead of Hillary across the south. Sure, Rudy won't roll up Reagansque numbers across the south but he only needs a majority in a two-person match-up.
Your analysis focuses only on the two extremes and leaves out the key voting bloc: the moderates. For every conservative like yourself who won't vote for Giuliani, the Rudy people believe that they will pick 1+ moderate and most polling suggests that this is correct. Contrary to what you see with Freepers, current polling shows that the vast majority of conservatives will vote for Giuliani in a match-up with Hillary.
This primary season is an interesting one for me as a political junkie. Philosophically, I'm very much aligned with Fred Thompson. Strategically, I see Giuliani as the strongest general election candidate. It puts me in a quandary. Do I vote for the person most aligned with my political views even though his chances of winning the general election against Hillary are too close for my comfort or do I vote for the guy who is most likely to beat Hillary? I'm glad I don't have to decide today.