Absolutely. The normal reaction to losing over a number of cycles will be to adjust their approach.It's very simple. The party might look for a strong Democratic Senator or Governor with moderate credentials particularly from a purple state. This is what the Democratic party did in 1992.
You and I know the Democratic party is very different* now and a Moderate in the primary will be running a gauntlet. If the party can coalesce around an aging Biden who was faltering until the power blocs came together to crush Sanders, they can also rally around a Moderate.
The problem is that it takes more than one election cycle for the Democrats to unify around moderation. I think it's pretty clear that their current agenda is not that popular. They really need the Republicans to trip up bad on renominating Trump or extreme abortion bans in less than vibrant red states.
* Contrary to Val mocking LaRue's meme, the Democratic party is different. Which leads to the usual political, "No, your party is different. Your party changed!". Is Joe Biden the same politician as his 1992 version?
The Dems got absolutely creamed from 1980 to 1992 and moved to the right and triangulated in 1992 like you say. And yes, over the last 30 years, they have shifted leftwards from those "third way" positions.
They could easily go back in that direction if they thought that's where the voters were.
The same is, of course, true for the GOP. They are not the party they were in 1992 either.
If they think Trump and Trumpism is dragging them down, they will face pressure to moderate or shift in another direction.
If there is a major issue of interest that neither party is addressing, maybe a third party jumps in and pushes that until either it gets taken up by one of the other major parties or one of the major parties collapses in on itself via a split.