I don't think it is necessary to get too twisted over Obama characterising the Ryan budget proposal as "social Darwinism". There are several reasons.
1) There are republican/libertarian voters who already don't see "social darwinist" as an epithet and see it as desirable (Randians I should think are among this. There's also a strong strain of conservative talking points that sees poverty as a deserving condition for those that are so afflicted). So far as Ryan's budget lives up to anything approaching a social darwinian worldview, it is exceptionally complimentary to call it that in the view of such people. This is mostly because it does not come close to achieving any social darwinian aims. The basis for this as a non-issue is that these are voters who either won't see Ryan's budget as such a thing, but will see it as closer than anything from the Democratic Senate/Obama. As such, they probably will already vote against Obama anyway and he risks nothing to raise the issue.
2) The vast majority of people who vote for Democrats are not likely to care very much about the risk of actual social darwinists. The sort of person who does worry about such things is likely to approve of Obama's rhetoric in this case for political reasons rather than out of some actual policy based fear. That is, that this is probably a person who already dislikes Republican/conservative conceptions of market behavior, to say nothing of libertarian views of either the Chicago, Austrian, or Randian schools. Or those of any actual social darwinists. They will approve therefore because it sounds like Obama has picked a fight.
3) Political rhetoric is valuable for political reasons. The reason Republicans have called liberals/progressives/etc "socialists" is that it has political value resonating from the cold war era. It has little to do with what few policy disagreements Republicans and Democrats have on most economic issues. Modest proposed changes in marginal income tax rates are not by themselves very socialist for example. The distinction between a government issued voucher structure of health care insurance and health care mandates is small in economic terms (it is bigger than the distinction between employer mandates and tax credits and health care mandates for individuals, but it's not so big that I care all that much to support Ryan-type ideas to the exclusion of much better market-based ideas as even a half-step). Rhetoric makes it sound like there are fights worthy of having in these arenas.
I suppose I would prefer if semi-libertarian conceptions of economics and fiscal/social policy were not so easily depicted as "social darwinism". Because I don't think this depiction is fair and accurate. But I'm not sure it accomplishes much in the present election cycle. Libertarians are already a marginal influence on policy in most cases and what influence they are having on policy tends to be in other areas than in the neoliberal consensus of economics in the post Cold War era (eg, on gay marriage, drug war, war on terror, relative pacific foreign policy views, etc). So it's unclear that being so labeled has much of a degrading effect in the near term. (This is to say that I don't see much actual libertarian economic thought being integrated within the Republican policy proposals on economic issues, even though there's clearly a "tea party" influence to some of it).
The real downside is that it continues keeping very marginal or unimportant fights at the forefront of our political views and not that it marginalises the views of close ideological cousins. I want people to argue about civil liberties violations. Supreme Court decisions allowing strip searches or cell phone tracking to me are far more offensive to human rights and liberty than those allowing unlimited corporate and union donations to election campaigns.* I think of the drug war of prohibition as among the most damaging social policies we've pursued, both for race relations, economic potential, and overall social justice and social liberty. Neither major party speaks to rising public interest in at least legalisation of one substance (marijuana). I want people to look to give voice to their purported war weariness. Rather than to tolerate continued rampant and wasteful interventionism and thus have only choice between one form of interventionism and the other. There is even a very small social gap between the views and policies of the sitting President and his political adversaries on issues like homosexual marriage and adoption rights (the difference certainly exists on these, but there are still many Republicans with much more modest views which are roughly those of the mushy center of the American polity), the effective defence of abortion rights (Democrats mostly just defend the existence of such rights rather than the actual practice of them), and so on. Perhaps we don't talk about these issues constructively and often because the distinctions between parties is smaller, but it would seem like there is a constituency available for them where a voice would be appreciated and even beneficial to the country as a whole.
*I do think regulations requiring better transparency would be appropriate there, just as the court upheld transparency requirements for petitions for referendums. But I'm otherwise unmoved by the amusing Colbert gag on SuperPACs as though his movements would have been illegal before Citizens United. He's both a product of a media corporation, which was previously excluded from regulations, and receiving mostly individual donations rather than corporate support. The movements of Adelson types were also not illegal before, they just used different mechanisms, 529 plans. In other words, the strange focus on Citizens United and SuperPACs isn't all that interesting to me as some new attempt or weapon for oppression.