The problem as I see it is that the voters in [Iowa and New Hampshire] take their responsibilities too seriously. The try to think for the nation and not simply as a voter. I recall a perfect example of this phenomenon from the 2004 election. Howard Dean entered the Iowa caucuses as a surprise favorite but didn't win. After the voting I heard an interview with a voter who explained that she preferred Howard Dean to John Kerry, but voted for Kerry because she thought he was more electable.This is my third presidential election cycle in New Hampshire, and from a personal perspective, it's awesome. So much attention! So many chances to see candidates! Let's have waffles with Mike Huckabee! Oh, hey, Giuliani's at the office! It's fun, and it lets anyone interested learn enough to start thinking of himself as an "expert" quite easily.
But, yes, this means we take ourselves way too seriously. In 2004, I came very close to making that exact "Kerry's more electable" decision described above; I wound up sticking with Dean, but I was agonizing over it until I walked in to vote. Of course, yes, there would be some of this type of thinking in any state, but when a state has this privileged place over and over, it's way too easy for more and more people to start thinking of themselves as experts or insiders or analysts rather than, you know, voters.