The literal answer to that question can be debated. At one end of the possible spectrum it could date back to when LBJ buried the dream of The Great Society under a mountain of death in Vietnam. Or one can argue that the final tipping point was the Supreme Court decision on Citizens United. In between we saw the conservative movement sweep to power under Ronald Reagan in 1980, and Democrats respond with the Democratic Leadership Council and Bill Clinton's centrist steeped “New Democrats” recalibrated political identity. Whatever the literal moment of retreat, at heart the question is rhetorical, and can be boiled down to a three letter abbreviation; WTF?!?
Social change has never been about having realistic goals in the short term. It has never been about negotiating compromises that can win the support of those who embody the status quo now. When that is the benchmark used to calibrate fundamental justice we end up with agreements like a written Constitution that defined resident African American slaves as 3/5ths persons when it came to drawing up Congressional districts.
Negotiation and compromise concerning justice in any form represent at best a temporary stage in an ongoing larger battle; an argument that half a loaf is better than none. Some times it may be, other times not, but never is a half loaf reason to disavow the need for a full one if that in fact is what is truly needed. Republican politicians seem to grasp that fact more clearly than do most of our Democratic leaders. No compromise resolves virtually any issue for them. As far as many of them are concerned, the American Civil War didn't even define the limitations on States Rights. Conservatives will never convincingly repudiate their vision for privatizing Social Security no matter how often Democrats beat them back on it. They just kick it back to one of their movement think tanks for repackaging before they trot it out once again.
The Republican Right never used the fact that Democrats held a decades long near institutional lock on majorities in the House of Representatives as a reason to abandon their own extreme vision for America. They continued to fight hard, weathered setbacks when the winds blew against them, and negotiated for the best deals they could manage when full victory seemed temporarily beyond their reach. But they never disowned their vision of what they believed would be best for America. They still haven't abandoned their call to gut progressive taxation, for another example. Each presidential election cycle one or more of their leading candidates offers up a new version of a “flat tax” scheme, calling it a “tax reform”. While they haven't fully gotten there yet they sure as hell have their half a loaf already.
Republicans began fighting to privatize public education at a time when even the concept of that seemed foreign to most Americans - when there seemed to be no way in hell that governments controlled by Democrats would ever go one inch down that road. That didn't matter to them, they just kept advancing the notion until they gained some foot holds they could build on. Tuition free public colleges and universities may sound pie in the sky now, but they once were well established in many places, including California. That was at odds with the vision though of Ronald Reagan and the conservative movement behind him. Here is one summary of what happened to those tuition free public institutions:
"California’s public-university system, still the largest in the nation, abolished tuition three months after it was founded in 1868, implementing instead a fee for additional services, such as health care, that at first was tiny.
The era of free tuition ended, ironically, with the student movement of the 1960s, just as campuses were getting more populous, diverse, and democratic. Ronald Reagan made the University of California a major punching bag of his 1966 campaign for governor of California, with the encouragement of FBI director J. Edgar Hoover, who saw campus peace activists as dangerous subversives. Upon taking office, Reagan managed to have UC president Clark Kerr fired—he had been the architect of mass higher education not just in California, but across the country—and hiked fees at the UC colleges to the approximate levels of tuition charged elsewhere."
http://college.monster.com/news/articles/1064-whatever-happened-to-when-college-was-free
Democrats have learned to check their visions at the door of a Republican led Congress. It is one thing to mobilize your forces for some Congressional battle on an issue you believe in, only to then fall short of fully prevailing. The more extensive your mobilization, the better compromise you are likely to achieve regardless. It is another thing to fall to mobilize and fight for what you believe in because you can not clearly identify a sure path forward to certain victory. Even worse is a basic lack of faith that what may indeed be impossible today can in fact become possible tomorrow if the battle is fully joined.
It's not that Bernie Sanders can't do the math - he can count seats in Congress same as anyone else. It's just that he can see the folly in unilaterally disarming our dreams. Pardon my censored French but Bernie is right. F*ck that sh*t. We would all be working 60 hour weeks today if a bunch of Wobblie organizers looked at the strength of the Mill Owners who opposed them and said "You better go home to your families, boys" rather than "Which side are you on?"