IT'S THE ECONOMY, STUPID. I think the bursting of the tech bubble that Matt identifies as kickstarting upscale populism is actually pretty good evidence for Noam Scheiber's argument that the wealthy are fickle allies for the progressive movement, and that whatever support they currently provide will dissipate as soon as political/economic conditions become more favorable for moderates. That said, the heyday of the DLC Democrats was not during the tech bubble of the late '90s, but during the collapse of old-school liberalism in the late '80s. The shift away from interest group politics and towards market-oriented programs was a savvy electoral strategy for a moment when a Democrat's success relied on sparking a media narrative declaring them separate from those old, bad liberals. It well predated Silicon Valley's eminence, and if the two eventually entered into an alliance, it was one of convenience, brought on by Clinton's occupation of the White House during the boom.
That said, Matt is no doubt right that the populist swings of pessimistic times give way to a comfort with the status quo during more bountiful periods. That's a big part of what happened to the Clinton health reforms -- health care became a major issue during the 1990-91 recession, when folks were losing their jobs and coverage. By 1994, we were back in an expansionary period, and the economic anxieties powering the push for reform had calmed, rendering Americans far easier prey to scare campaigns over what they could lose.
How all this plays out politically is more uncertain. The overheated expansion of the tech years isn't likely to repeat itself anytime soon, and inequality has widened so dramatically that the average expansionary period barely brushes the median voter. I think the country is headed towards a certain corrective period, wherein universal health care and a handful of other progressive priorities (like better labor laws) will be enacted, thus narrowing inequality, easing economic anxieties, and allowing Americans to vote Democrats out of office again. The circle of (political) life, I guess.