I think it makes sense for Cruz and Paul supporters.

First off I think they could rally a lot of the young Republicans to their side. Young Republicans tend to be more libertarian, and will likely be happy to vote third party. Especially because most of their friends probably will hate Trump so much that they might not want admit to voting for him.

This would send a powerful message to the party, and help define what the Republican party should adopt as policy and what it should leave behind.

But at the same time I seriously doubt that most of the Romney Republicans and the independents who left the party after the rise of the Tea Party will get on board. In fact it is the opposite of what they want.

I think that this represents the four way split we are seeing in the Republican Party (and that we've really been seeing since 2010).

There are the Establishment Republicans that are closer to the Eisenhower and Rockefeller Republicans of old. Many have left in the past decade or so, which has weakened the party greatly. Now they're mostly represented by Romney and Lindsey Graham types.

There is the Religious Right. They are Huckabee and Santorum types. Usually they are rooted in homophobia, anti contraception, and abortion campaigns.

Then there is the Libertarian wing. This wing is itself totally fractured and I doubt has much relevancy to the immediate future of the party. Cruz is nothing like Ron Paul, and the Koch brothers are libertarians but generally they align themselves with the establishment Republicans.

And finally there is the populist wing. This wing has the largest crossover with the Democratic party. It's about personality and messaging. Usually they are anti trade and anti immigration (on both parties). White blue collar workers tend to like them, as they almost always run on a platform of "us vs. them" (this is a common theme in both parties). Each populist defines themselves individually, as the actually policy doctrine is irrelevant to the average populist voter (as we have seen among those who like Sanders and Trump).