FF, but he should've let the Populists replace the dying corpse of the Democratic Party.
I don't see how this was even a remote possibility. The Democratic Party was too strong in the South and the Republican Party too strong in the North for the Populists to challenge one without fusing with the other.
The Democrats were absolutely annihilated in the 1894 midterms, in what was probably the worst congressional landslide in history (the Republicans even won a seat in Texas). Without Bryan they would've been finished. The party needed Bryan much more than Bryan needed the party. 1) Not in the South, which provided the Democratic Party a base to recover from.
2) The Populists outside of the South were also wiped out in the 1894 House midterms.
Again, I don't see how it was a remote possibility for the Populists to replace the Democratic Party when they had zero appeal to urban labour and Catholics/ethnic voters. Maybe they can become the main opposition to the Republican Party in the West. Maybe they can challenge the Democratic Party in the South, although considering Southern elites happily used violence and outright electoral fraud against Populist candidates this is probably much more difficult. But becoming a national party was beyond them unless they could significantly broaden their appeal in the Midwest and Northeast.