It shows how positively inept the Democrats become whenever they embrace their radical base too much. Bush could easily have been defeated, but no the Democrats had to put their moonbats in the forefront, and put John Kerry on the ticket (and make Howard Dean his big challenger)... even so, it was much closer then their earlier attempts (1972, 1984, 1988) - showing either that Bush really is a flawed president (my take) or that the lunatic left is becoming more popular (which would be scary).
Bush was actually pretty strong, he wouldn't have been easy to beat. His approval ratings were about 52% on election day, which closely mirrored his share of the PV. That's fairly close to what Clinton had in 1996, from what I can dig up, he was in the mid-50's.
What Bush had going against him, and what made it close, was that he was divisive. The people who disapproved voted against him, those who voted with him approved. There was little swing over the course of the campaign, and Kerry served as somewhat of a blank tablet as the opposing candidate.
If the 'lunatic left' had gotten their way, it would have been Howard Dean and not John Kerry. Kerry won the nomination because, somehow, voters were stupid enough to believe that he, and not a midwestern populist like Gephardt or a good-looking southerner like Edwards was the strongest possible candidate. Would Gephardt or Edwards have won? Probably not, but you'd have seen the margins in Ohio and Missouri cut in half as the opposition candidate was somebody who could relate to the people suffering through economic problems. Kerry couldn't relate to these people, so they ended up voting down cultural issue lines and supporting Bush.