Hudak really isn't such a radioactive person. Its hardly preordained that he will win the next election, but he does have a sporting chance if he runs a decent campaign. Its totally possible that if Ontario's fiscal situation declines at a rate worse than current forecasts (already 12.2b for '10-11), voters might resonate with a kind of mini CSR. Harris himself was in large part a reaction to the Floyd Laughren days, and center-right parties seem to be doing quite well in Europe at the moment.
As much as I would have preferred Elliot, there is something to be said for the idealogical certainty Hudak has. It goes without saying that the religous schools thing hurt Tory, but he was hamstrung from the begining by his refusal to really differentiate his fiscal policy from McGuinty's. If Hudak can make the point that, in a nutshell, taxes=McGuinty=bad, it would probably resonate fairly well.
I really doubt the HRC thing would hurt Hudak either. I couldn't care less about getting rid of that amateur body. All Hudak would have to do is make an add showing the ridiculous cases which make it to the HRC, like the transvestite suing over which washroom she/he could use, and most people would figure out that HRCs are at best irrelevant to human rights.