If people think he should drop out now, then Pau lshould as well and so should Santorum. I dont understand this point at all. Sorry.
The point is that the Republican vote is split in three:
1. The Moderates (mostly for Mitt)
2. The Conservatives (split between Newt and Santorum)
3. The "Old Right" and Libertarians (mostly for Ron Paul)
If Santorum has taken off with momentum and impeding on Newt's campaign strategy for pulling off a win, then it could be beneficial for Newt to drop out in order to quit splintering the conservative vote.