This was classic Obama, both from a policy conceit and rhetorical framing. Anyone who read The Audacity of Hope knows how Obama works through issues—he sets up how one side conceives it and how the other side does and then, after admitting he is inclined toward progressive/Democratic side of the ledger, he humbly suggests the best solution is probably somewhere in between.
Such an attitude works when both sides you mediate lie toward either end of a spectrum of reasonableness - when both have sensible points of view that differ mainly on relative emphasis placed on items that everyone can agree are important.
In the current environment, such mediation-between-viewpoints reads more like this (the idea here is not original with me, but I have no idea who started it - and searching hasn't been helpful in finding the origin, sorry):
Side 1: Let's kill all the kittens!
Side 2: What? No! That's ludicrous! There's no need to harm kittens!!
Mediator: Tell you what. We could just kill half the kittens, while recognizing that it's really only half-necessary to kill kittens.
If one side is batshit insane (and prepared to lie and move goalposts and never actually compromise), you can't hope that an intermediate position ever makes any sense. Halfway to batshit-insane is still insane.
The golden mean is not resistant to outliers, and soon starts to smell of them