Actually, I don't find Ron Paul or libertarians dangerous as a Democrat at all.

Scenario One: Libertarians and Paul fail to garner electoral success. No gain or loss for Democrats.

Scenario Two: Paul's Campaign for Liberty hollows out the Republican Party and turns it into the Libertarian (but still pro-Life) party. Big Democratic gains here -- no more problems with torture from the opposition, no problems with legalizing gay marriage, or marijunana. In theory, they'd also help with all kinds of anti-corruption measures too (lobbying limits, campaign finance, etc.), and the reasonable ones might realize the environment really is an issue, and needs to be addressed by the state. Cap & trade where the proceeds are used to cut income taxes might actually become a viable compromise.

Scenario Three: Libertarians break off a sizable chunk of the Republican base, and America becomes a 3 party system. Assuming the groups are roughly even in size, they'll have to work together just to reach bare majorities in Congress, and two fully united parties could break filibusters. I'm not sure how that would work in practice, but it'd be fascinating to see for this political junkie.

The implications of Rand Paul running for Senate in KY works out the same way from my point of view; it's only good news.

However, the DSCC is still hoping Bunning decides to run, because then it becomes a possible Democratic pickup.