John McCain is not unbeatable. He has two glaring weaknesses; his support for the war in Iraq and his unpopularity with the GOP base. Unfortunately, Hillary Clinton can all but eliminate those disadvantages. McCain has effectively sold himself over the years as someone with conviction and integrity; Hillary's inconsistencies with regards to the war will hurt her, even if she's on the more popular side of the issue right now.
Her nomination will galvanize support for McCain without him really having to say or do anything. How many Democrats do you know that detested Kerry in the 04 primary race, but worked their butt off for him to defeat Bush in Novemeber? Kerry raised incredible amounts of money and support simply because he was the only thing stopping Bush from serving another term.
George Allen used this strategy when he was head of the NRSC during the '04 cycle. Just the vague threat of a potential Hillary presidency somewhere down the road helped him raise gobs of money. In fact, I remember getting a letter in the mail from Allen a few years back. In it, he argued that if the Democrats took control of the Senate, Hillary would become Majority Leader and then eventually President.
Roll your eyes all you want, but it worked. Being associated with Hillary played a significant role in defeating then Majority Leader Tom Daschle (one of Obama's earliest and biggest supporters. I wonder why?) in South Dakota. It also helped vastly inferior GOP candidates like Tom Coburn and Jim Bunning in their Senate races in '04.
Right now, Democrats are giddy that well-known conservatives like Hannity and Limbaugh are bashing McCain on a regular basis. But how long will they keep it up if Clinton or McCain are the only two choices left? In the meantime, right-wing whackos complaining about McCain's conservative credentials makes him that much more popular with the Independents and moderates who can swing a general election.
I think many, many independent and Republican women will walk into the voting booth and, seeing that Hillary is more intelligent, harder working, and a better overall candidate than McCain, will gladly pull the lever for her -- even if they say they're not going to or are unsure.
Having said that, I think Hillary would be much less competitive in Virginia and will make it harder to elect quality candidates like Judy Feder, Tom Perriello, and Glenn Nye.
Moreover, I think it helps the Democratic party so much to get out of the dynasty game. And I think a Hillary win comes with a 55-45 Democratic Senate, whereas an Obama win comes with a 60-40 Democratic Senate, and an extra 20 or so House seats.