Was UK 1997, in retrospect, really that bad for the Conservatives?
...yes.
Let me rephrase. Was the sting of losing badly but missing the Iraq war as bad as the sting that later came to Labour?
Much much worse.
Considering what happened to Labour, in Labour and around Labour 2007-2010, their result at the last election should be considered stunning.
That Ed Miliband is so far behind Cameron and yet is still very much in the running to be PM in 2 months time should be considered stunning as well. It shows how poorly the Tory brand is still received. They continue to struggle in a way Labour just doesn't.
Should Labour win in May (on their own or with a partner), I think the chattering classes will start throwing round the eye-roll worthy "default party of government" label that was once owned by the Tories.
The 1997/2010 comparison fall further apart when you consider that in 1997, Labour broke into seats in which they'd never even come close before. There's a whole slew of Labour safe seats which, as recently as 1992/1997, were marginal (Wallasey, Ellesmere Port, Sefton, Leeds NE, Oldham) and a whole slew of LD seats which were once Tory but now are no-hopers for them (Hallam, SW London, the Lake District).
The Tories in 2010 didn't get far beyond seats they lost in 1992 and 1997, and even then, there were so many seats they missed that they had no business losing (Wirral South, Edgbaston). And, it almost goes without saying, they've failed to make any progress in Scotland. Basically, 1997 was a huge realignment, 2010 definitely wasn't, but 2015 could be (UKIP, LD collapse, Scotland).