Ramesh – I’m sure you’ll get lots of responses to your question more thoughtful than this — which really isn’t an attempt at answering your question.
But don’t you have to start with Locke’s second treatise which used the phrase “life, liberty and the pursuit of property” (or something close to that, I’m quoting from memory). Why did Jefferson switch the words? My own personal view was always that while the pursuit of property (in the Lockean sense) is necessary for a liberal regime it is not sufficient for a moral — i.e. healthy — society. I guess I agree with Charles Murray. “Happiness” obviously includes the pursuit of property but it includes something more — I think, an acknowledgment of something larger and more transcendent which must include notions of a decent life. Obviously, Jefferson didn’t use “virtue” instead of “happiness” for a reason but, like you, I don’t know what that reason was.