Where to begin.
First, it wasn't a "huge" defeat. It was a relatively small margin last I looked.
Second, it was a close victory over a 3rd party candidate that was late into entering the race
Third, the "GOP" is what helped to end up losing this thing for them, as polls seem to point that the former GOP candidate supporting the Democrat instead of the Conservative was the main reason a number of undecideds went Owens over Hoffman.
Fourth, despite being a 3rd party candidate and being a late entrant the fact that Hoffman managed to be seen as the legitimate #2 in this race, knock the GOP candidate out of the race essentially, and actually had a legit and realistic shock in and of itself is a win of sorts for that "movement". Its kind of like the Giants vs Patriots in the 2007 season, where even though they lost it was a positive for them because they went in and punched them in the mouth and did a ton better than you'd have expected just a few months back. After Conservatism was declared "dead" by many last year at this time, the fact he managed what he did is a positive for that movement even if he didn't win it all.
Fifth, that doesn't mean its all sunshine and roses. It would've been far better if he won. But you're taking a low single digit loss by a late entrant THIRD PARTY candidate that up until 4 days prior was having to compete with the GOP and 2 days ago had the GOP essentially throwing support behind the other candidate as way, way, way bigger of a referendum on conservatism than it is while simultaneously ignoring the large amount of progress the guy made.