If Dean doesn't have a melt down, then he is a much more exciting candidate to win the nomination then Kerry. He very well could of gotten the base riled up, he had grass roots support with the Deanites, and could be the first candidate to use the internet as a fund raising and grass roots support getter. Could Dean of won in 2004 in the GE? Maybe. But it would come down to what the campaign ends up being about. Dean didn't have the record that Kerry did, so foreign policy is a weaker issue with him but if he can effectively portray Bush as an elitist giving tax cuts to the rich, and excite the base enough to raise voter turnout across the board then he could of totally won.
This is what I have been trying to say, albeit less eloquently than you did. However, the Democrats would do worse in Congressional races, IMO, in order to ensure a Dean victory, as they would likely divert congressional funds towards the presidential race to make up for the surely wide gap in the initial post-convention polls.