I don't think your first sentence necessarily holds true - at least it doesn't lately. We just don't see powerful "blue dog democrats" and moderate republicans holding the keys any more.
While moderate candidates have more independent appeal - it's voter turnout that wins elections, even in competitve districts. Appealing to emotions, especially appealing to fear has been extremely successful at getting turnout for particular voters (ie, anti-abortion voters for example). Maybe that will calm down or moderates will turn out more and end this trend (as they did with Biden) - but even competitive races can turn out extreme candidates.
Another possibility to consider, is that what we call "competitive districts" are really just "moderate districts" to begin with. Places the population isn't particularly threatened by or well-served by either party. In that case, it makes sense that they would be both more competitive, and more moderate.
Sure, it isn't an absolute effect, I could have phrased that better. I think it's pretty clearly a directional effect that safer districts pick their representatives in the primary (which often have a candidate backed by the institutional power structure).
But that just reflects the fact that a given party has overwhelming support in those districts. It doesn't mean that the result is unrepresentative. So Phila. and NYC pick their mayors in the Democratic Party primary. The result isn't unrepresentative - there was no question that the mayor was going to be a Democrat.
Yeah, I'm not arguing that it isn't representative, I'm arguing that we shouldn't design for that outcome, because it shifts power in the direction of the party and away from the constituents (and it does so even in districts where the constituents are largely comfortable with the resulting representative).
While moderate candidates have more independent appeal - it's voter turnout that wins elections, even in competitve districts. Appealing to emotions, especially appealing to fear has been extremely successful at getting turnout for particular voters (ie, anti-abortion voters for example). Maybe that will calm down or moderates will turn out more and end this trend (as they did with Biden) - but even competitive races can turn out extreme candidates.
Another possibility to consider, is that what we call "competitive districts" are really just "moderate districts" to begin with. Places the population isn't particularly threatened by or well-served by either party. In that case, it makes sense that they would be both more competitive, and more moderate.