Here is an excellent article explaining exactly why Hillary would make such a bad nominee; many independent voters hate her, especially those who have conservative leanings. For them; she represents the good ol’ Democratic Party, the “New England” liberals.
Hillary as the Democratic nominee would push many independents to vote for John McCain. Obama would at least assure that independents would be split fairly evenly. And that’s enough to make a difference in who becomes the next president. Remember, Bush lost the popular vote!