Are you sure you aren't mistaking that rating with the Senate race?
And this is really no surprise. Daugaard is a popular and uncontroversial Governor who you usually never hear on national news. Sure, they're known for their conservative behaviors of passing Stand Your Ground laws or rejecting Medicaid expansion (and even considering a "religious freedom" bill), but Daugaard is naturally just an economically and militarily friendly guy who recently signed a whole bunch of laws that don't appear to be of major concern. Also kind of interesting, Daugaard and Mead are the only two Republican Governors not to officially declare their re-election bid yet and both of them have Tea Party challenges from Lora Hubbel and Cindy Hill, respectively.
The Governorship of South Dakota notably hasn't gone Democratic since 1978 and even a Herseth Sandlin run couldn't make this competitive in the general. I don't think she has her eyes on the Governorship anyways and is eyeing the Senate. With the Daschle-Reid controversy destroying her chance at a bid for the open seat this year, let's cross our fingers that Thune steps down in 2016. Even then if he didn't, I'm sure Daschle would want to rally behind Sandlin this time considering it was Thune who took him out in the first place and he'd want nothing more than to see Thune defeated.