Why is Iowa not a red state?

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Those maps really helped me understand the Iowa/Missouri border, thanks ! Then again Iowa religiously looks a lot like Kansas and Nebraska still.

There is quite a demographic difference between Iowa and Kansas, in that the former has much less Scandinavian and German, and more American/other ancestry, and American ancestry is usually associated with a strong republican lean.
However, Iowa and Nebraska are very alike not only religously, but also ancestry-wise, with the only exception being Iowa having a bit more Dutch, and Nebraska a bit more Central European (Czech/Polish) ancestry.

For reference, here are the main ancestry rates as per the 2000 census:
                                               KS      NE       IA      WI
    German/ Austrian / Swiss:   26,7    39,5    36,8    44.3
    Scandinavian                        4.2    10.6    11.5    13.6
    American / other                 27.7    17.4    15.3    15.2
    Scotch, Irish, Welsh             16.1    16.8    17.2    13.2
    English                               11.1      9.8      9,7      6.7
    Central European                  2.3      9,3      3.3    12.1
    italian, French                       5.4      5.5      4.6      8.2
    Dutch, Belgian                      2.4      2.4      4.9      3.9

Urbanisation (2000)                71.4     69.8    61.1    68.3

So, ancestry & religious orientation do not explain why Iowa and Nebraska vote so different from each other, at least in presidential elections.  Neither does urbanisation, b.t.w.

http://fivethirtyeight.blogs.nytimes.com/2012/07/11/iowa-racially-homogeneous-but-politically-diverse/

Here's Nate Silver's analysis

In short, he says that Iowa has added a lot of white collar and high tech jobs in recent years and many of those people lean Dem. It's also one of the most educated states in the nation. Eastern Iowa also has a lot of manufacturing jobs which makes that region vote a lot like the rest of the rust belt. 

And that seems to be what makes the difference: Comparing Nebraskas and Iowas GDP structure (2001), the former is more agricultural (8.3 vs. 6.6 % GDP share), transport-oriented (7.1 vs. 3.3) and government-based (13.1 vs. 11.1), while Iowa's economy is much more centered on manufacturing (18.6% of GDP vs. 11.8% in Nebraska). In essence - there are much more (white) blue collar workers in Iowa, while Nebraska employment is more based on the (energy-price sensitive) transport sector.

Such differences in economic structure should, b.t.w., also explain why the Dakotas are voting so different from Minnesota, in spite of obvious demographic similarities.

[P.S.: If anybody has a link to a page with decent GDP statistics per state, i.e. with a bit more of data aggregation / selection / cross-regional analysis features than the crappy BEA side,  I would be prepared to do some more analysis of voting trends vs. economic structure]