For those seeking to undermine Progressives, shouldn't you be trying to convince most everyone that Progressives are theocrats, and not just Progressives?

Probably, but the context of that particular quote was only about convincing progressives.

And I thought Moldbug said Progressives win because their politics empower the media, academia, and government, creating a positive feedback loop for Progressive opinions in those arenas.

He might, but not here.