Jonathan Chait writes about it more convincingly than I could:
Hillary Clinton is a highly unpopular figure. In the last Gallup survey, 50% of respondents have a favorable view of her, and 46% negative. Sometimes her averages goes higher, but sometimes it veers into negative territory. Obama has very high ratings. In the most recent poll, 59% view him favorably, 32% negatively. The difference between plus 4 and plus 27 is enormous--a Detroit Lions v. New England Patriots-size gap.
On top of that, independents who vote in the primaries and caucuses have shown a very strong preference for Obama over Clinton. That is the closest available approximation of a swing voter.
As Chait adds, the idea that the "Republican attack machine" would make any Democrat just as disliked as Clinton is nonsense. It's possible for Obama to become as unpopular, but he'd have to run a dreadful campaign for that to happen. He is a fundamentally different candidate, one who is tailor-made in both word and deed to bring in those swing voters.
One thing to add to Chait's analysis is that the idea that Clinton is already as unpopular as she's going to be misses a major point. That is, the raw nerve the couple rubbed daily while in office has scabbed over. Some of us looked even started looking back a bit fondly, especially in comparison to the current disastrous presidency, and forgot the proximal things that made us so livid.
No more. As the Clintons see a legitimate opponent daring to usurp their rightful throne, the demagoguery, uncomfortably hardball tactics, and outright distortions have begun again. Someone like me now remembers viscerally why I couldn't stand them.
The post finishes with a very insightful point:
That so many Democrats think this question is complicated suggests to me that maybe people aren't good as assessing the popularity of their co-partisans. To Democrats, it's perfectly obvious that the strongest Republican nominee is John McCain. He polls very highly, everybody knows Democrats and Independents who like him, and so on. But Republicans are constantly debating this. You see Republicans spinning horror scenarios of a McCain nomination leading to a splintering base or depressed turnout. To Democrats it's bewildering that they even debate this. Lots of Republicans feel the same way about the Clinton/Obama electability debate.