While individual policies may be advisable, as a general proposition I think this is the wrong way to go. Not only does this do violence to the constitutional order conservatives are supposed to conserve, it forever puts the right in a bidding war with the left about what government can and should do. Conservatives will lose that fight -- and possibly their souls in the process.
What's the alternative? Well, if the game is rigged against you, continuing to play the game is the very definition of idiocy. You have to change the rules.
My own view is that conservatives should recommit themselves to federalism and states' rights. The Party of Lincoln should protect core civil rights, but beyond that, states and localities should be given as much freedom as they can handle. If California wants to become Sweden with better weather, let it. If Texas wants to become Singapore on the Rio Grande, great, go for it. And the same principle goes for cities and towns within those states.
Of course, conservatives already say they believe in federalism, but they rarely demonstrate it save when convenient. Which brings me back to the question of fidelity to principle. In principle, Republicans should look at the monumental clutter in Washington like a boat with too much ballast to stay afloat: When in doubt, throw it overboard.
In practice, Republicans should be more strategic and discriminating. That means taking positions that are right on policy, but also, when possible, highlighting issues that run counter to the (unfair) caricature of Republicans as prudish moneybags. Personally, I'd start with federal marijuana laws. The tide has turned on pot, and states are going to keep legalizing it. Why should Washington stand in their way? The beauty of federalism is that you don't have to condone legalization in one state or prohibition in another. It's just not Washington's fight.
This can't happen overnight, but the system didn't get rigged overnight either.