When I think of the term (not that I think of the term often) I don't think about people losing faith, values or morals. I think about men getting manicures, being afraid to kill spiders, not knowing how to drive a manual, not knowing how to change a tire (much less a starter), mom's showing up to yell at teachers and bosses when their spoiled little brats get yelled at for being little bitches, asking to be banned from a message board because they can't figure out how to calm down, the NFL's wussy rule changes, giving trophies for competing, helicopter parents and Janet Jackson's nipple.
I agree with you on almost every front you stated there, and think its ridiculous that political correctness and the left demand that people be more equal no matter how they work. But what I think conservatives are saying is that we need to bring back the traditional way of life in order for the nation to be mentally and physically strong. That's what I meant when I was saying losing morals and values. I don't think we need to be religious or be very disciplinary in order for our society to be strong, but I think raising children in a way that they understand consequences and how to act in front of people, etc. is important. What you stated is basically political correctness that is making us wussies, and that I can agree with. But I do think conservative pundits are really talking about the new, more secular society that focuses more on enjoying themselves more than doing the most work, that is decaying our strength as a nation. And that I don't necessarily agree with.