2. Sanders might still dominate a 3-way race
I see the senate race as a crapshoot so better to stick Dubie in the House race. If he loses (either race) he can still run for governor when Douglas is through.
I'd rather keep Dubie at Lt. Gov. than have him run for the House (even if we assume that he wins the House race).
And if Sanders would "dominate" a three-man race with Dubie and Racine (as in, have a lead of 8%+ the whole way through and deliver on election day), then I don't think that Dubie would win the House race either. Doug Racine was the Democrat gubernatorial nominee in 2002 (not 1976 or something) and I don't see how he would get below 20% or so of the vote (especially with a D nest to his name), so if Sanders wins by 8% he would get 44% to 36% for Dubie, and if Dubie can't get over 36% against Sanders and Racine I don't think he'd get 50% in another federal race.