Will, there's no moral equivalence here. The MoveOn PAC spot raises a legitimate issue about Bush's avoiding service in Vietnam with the help of family connections. To be sure, the advertisement reaches in charging that Bush went "missing" from the National Guard, since there's no definitive proof that he failed to show up for duty after moving to Alabama (and no real proof he did show up, either). This is hardly slanderous or directly dishonest in the way the Swiftvets ad is. But even though this spot is defensible, Kerry was quick to distance himself from it, as he was with the amateur Hitler ad that, as you yourself pointed out, the MoveOn folks also promptly denounced when they realized someone had put it up on their site.
5.Kerry's not hitting back hard enough. In response to the ad, Kerry has been sending surrogates like Wesley Clark and his Swift Boat buddies out to stick up for him. He's not hitting back personally because to answer these charges would fuel the idea that there's a legitimate debate about whether Kerry was a traitor who faked his medals. You lose that argument even if you win it, just by participating. But Kerry's avoidance isn't working. With the conintern stoking the issue, it's not going away. Perhaps Kerry should try to turn this libel to his advantage, the way an Alfonse D'Amato would have, by loudly proclaiming his injury. Without getting into the substance of the charges (which is a no-win situation), he should give Bush unshirted hell for the sleaze being sent out in his name. Kerry could ask his friend John McCain to stop campaigning for Bush until the Swiftvets ads stop. If Bush doesn't respond, Kerry should loose his own attack dogs and make a bigger issue out of Bush avoiding the draft.
Kerry volunteered to go to Vietnam and, once there, volunteered for dangerous duty. He killed enemy fighters, was injured and decorated. Then he came home and distinguished himself in opposition to the war. That a president who shirked any similar duty would try to make an issue out of Kerry's war record is simply amazing. Bush won't get away with it—unless Kerry lets him.