Hillary Clinton 2016 is a terrible candidate, Kasich doesn't really have any baggage, so he should be able to win fairly comfortably. A lot of Democrats would feel much safer staying home or voting third party in this scenario than against Trump.
Most people who are supporting Clinton now would support her over any other Republican as well. Democrats would have teared him apart and his favorability ratings would be in the tank right now.
Hypothetical general election polls consistently showed Kasich well ahead of Hillary. While I know some of that was because Kasich was not as heavily scruntized as Cruz or Trump, it doesn't explain everything. Kasich is a different kind of republican. He wouldn't be anatagonizing foreign policy experts. He wouldn't be losing the endorsements of people like Scott Rigell and Mark Kirk. What he did in 2011 with the unions would be the only thing Democrats would have to use against him, and it probably wouldn't be enough. He restored Ohio's economy, has a 60% approval rating, forced Medicaid expansion down the legislature's throat, and is against RFRA-type bills. He consistently campaigned as a moderate. I'm not saying Kasich would win the pacific northwest or anything crazy like that. But he would win by an Obama 2012 esque margin.
If voters are rejecting conservatism, then why isn't Hillary up by 10 points - if it's about ideology her health shouldn't matter, right? And why do the republicans still have a path to keeping the senate majority?