Watchmen As Alternate History

One of the most common comments I've read about the Watchmen movie from people who didn't read the book is “Why is Nixon still president?” and now that I think about it, I'm wondering that myself. To be honest, upon close examination, writer Alan Moore's alternate version of American political history seems poorly thought out and doesn't quite make sense.
In Moore's telling, Nixon sent the super powered Dr. Manhattan in to Southeast Asia and won the Vietnam War, and kept Watergate to coming to light by having Woodward and Bernstein arrested. He then got the Constitution's term limits on the president repealed, allowing him to still be in office as Watchmen's story opens in 1985.
Watchmen is one of two comics published by DC in 1986—the other being The Dark Knight Returns-- that perfectly captured the zeitgeist of the 1980's, and while the name and face of the president of Watchmen's United States are Nixon's, the foreign policy that Moore is reacting to is Ronald Reagan's.
Therein lies my major problem with Moore's alternate history. Quite frankly, I cannot see Richard Nixon, a president who prided himself on his statesmanship and foreign policy expertise, allowing U.S.-Soviet relations to decay to the point, as is the case in Watchmen, where the bombs are just moments from flying, especially with Henry Kissinger at his side as National Security Advisor and Secretary of State. Under Reagan, however, this scenario was frighteningly plausible.
If Nixon is merely a stand in for Reagan, why not use Reagan? In the early stages of Watchmen's development, DC nixed the use of the characters from Charlton Comics defunct “Action Heroes” line of comics, which DC had recently acquired the rights to. Moore was forced to create new characters that roughly parallel the Charlton heroes. Dr. Manhattan stands in for Captain Atom, Nite Owl II is Blue Beetle, Rorschach is the Question and so forth. Did DC also put the kibosh on Reagan as president, perhaps afraid of portraying the sitting chief executive in a negative light? Well, I've never heard or read anyone else even speculating about this possibility, and DC's publication of The Dark Knight Returns that same year, which does depict Reagan and not flatteringly, seems to argue against it.
Having Nixon still in office in 1985 does serve to establish that Watchmen is set in an alternate universe. Of course, the presence of a blue, glowing, naked man who can see into the future is enough to do that.
I'll just say that I honestly have no idea why Nixon is still president, especially as it seems to serve no real purpose storywise.
Another thing that bugs me is the business of Dr. Manhattan winning the Vietnam War. If he could do that, why didn't LBJ send him in years earlier?
So, I've worked out an alternate alternate history for the world of Watchmen that makes a little more sense to me, and still makes the story's events of 1985 possible.
In 1968, after the Tet Offensive, with the war going badly and public opinion turning against him at home, president Lyndon Johnson reluctantly orders Dr. Manhattan to 'Nam to end the war. It is precisely this victory, perceived as a grossly unequal use of force and a display of American arrogance, that inflames the left wing of the Democratic party against him and drives Johnson to withdraw his name from consideration for his party's presidential nomination.
As in real life, Nixon defeats Democrat Hubert Horatio Humphrey and independent candidate George Wallace to become the 37th president of the United States. His dirty tricks never come to light and his opening of diplomatic relations with the People's Republic of China makes him quite a popular president. Despite Nixon's disdain for domestic affairs, Dr. Manhattan has made electric cars possible, so the US is not dependent on Arab oil, and other innovations and new industries made possible by the good doctor help to keep the economy on track. Nixon serves out his Constitutionally allotted two terms and is still quite popular when he leaves office.
With that popularity, you would think that his vice president would be a shoo-in to succeed him. However, while Watergate never blew up in Nixon's face in this reality, apparently the entirely separate scandal that drove Nixon's first veep, Spiro Agnew, from office did, and Jerry Ford replaced Agnew. I only recently learned that Ford made a promise to the Senate during his vice presidential confirmation hearings that he would not be a candidate for president in 1976. Of course, in our world, by the time '76 rolled around, circumstances had changed. Ford was now president, and he reasoned at the start of his truncated presidency that to announce he wasn't going to run in the next election would make him a lame duck from day one and even more politically ineffective than he ultimately proved to be. In my alternate alternate world of Watchmen, however, Ford, being an honorable man, honors his pledge and sits out the campaign. The public is still in the mood to elect a Republican, however, and former California governor Ronald Reagan's political star had been rising throughout the sixties. With no incumbent in the race, he sails to the nomination and easily defeats Jimmy Carter.
Reagan proves to be as popular with the American people as he was in real life, and his handling of the Iran hostage situation by sending in Doc Manhattan, ending the crisis in about six hours and restoring the Shah to power, makes him even more popular. At the beginning of his second term, it is Reagan who uses his immense popularity to ram through the necessary Constitutional changes to keep him in office as long as the American people will have him. Thus, we find him in 1985, as the story of Watchmen commences, at the beginning of his third term and engaged in a deadly game of nuclear brinkmanship with the Soviet Union.
I haven't seen the film yet, but from what I've heard, Moore's alternate history of the American comics industry did not make it into the movie. This aspect of Moore's alternate history seems a little better thought out , which is only natural, since he worked in the industry, but still doesn't quite ring true. In Moore's version of events, the emergence of real live costumed crime fighters nips the nascent superhero genre in the bud, as no one wants to read about fictional super heroes when they can read about real ones in the newspapers. Thus by the 1950's the dominant genre is pirate comics. As it serves the story, this does make sense, as it sets up the parallel story from the “Tales of the Black Freighter” reprint comic, which also was left out of the film. However, logically, it seems backwards. After all, the existence of real life cops and doctors and lawyers has never dulled the public appetite for books, television shows, movies, and even comics about them. Going to the moon didn't kill science fiction. In fact, it seems to me that the emergence of real super heroes would only increase demand for fictional accounts of super heroic adventure.
None of these petty quibbles detract from the brilliance of what Moore accomplished in Watchmen. After all, when people talk about what makes the book great, they speak of its intricate structure, its deconstruction of the super hero genre, and its realistic portrayal of its characters. The alternate history is merely background detail.