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Such a campaign would have been brutal for the civilian population of the South (imagine what Sheridan did in the Valley and what Sherman did in Georgia spread across the whole of Dixie), but it would have been devastating to the moral of the North. Have the Army split up into small company or battalion sized units that can fade away into the hills and forests or back to their farms and towns and the Union Army would run itself ragged trying to catch them.

Imagine hit and run attacks, ambushes, destruction of rail and telegraph lines, bridges destroyed, warehouses burned, torpedoes (mines) set adrift in the rivers, snipers just waiting for you to let your guard down for an instant, and a hundred other terrors. How would the people of the North reacted if hundreds or thousands of young men simply disappeared without a trace to be buried in distant unmarked graves. Having buddies snatched from their tents at night, their throats slit while on sentry duty, or ambushed while on patrol with little or no way of striking back would be devastating to Union morale. Add Confederate cavalry raids deep into Union territory by such leaders as Forrest, Morgan, Mosby, and Stewart, burning and looting as they go.

The final outcome of such a conflict would depend on the resoluteness of the people on both sides of the conflict. Would the citizenry of the South be willing to endure hardships and brutal retaliation to preserve their ideals and their way of life, and would the people of the North be willing to endure similar hardships from raids that devastate their crops and savage their local infrastructure?

The historical records indicate that many in the South would have willingly endured such hardships for the Cause, while the North was divided on whether to support Lincoln's war or not. Would such raids have hardened Union resolve to see the war through to the bitter end or would they have resulted in protest and outcry similar to the New York Draft Riots?

My personal thought is that such a campaign would have succeeded in forcing the Union to the negotiating table. A prime example of this type of warfare is the East Africa Campaign of World War One. German General Graf Paul Emil Von Lettow-Vorbeck had fewer than ten thousand men (one thousand warriors and nine thousand porters and support personnel) yet he managed to run rings around the vastly larger British, Belgian, and Portuguese forces. Often outnumbered ten-to-one, Von Lettow-Vorbeck had his command divided into company sized units so that the Allies could not wipe him out in a single engagement. Notoriously low on supplies for most of the war, Von Lettow-Vorbeck would stage raids deep into enemy territory to capture arms and equipment. When the war ended, he was actually staging an offensive campaign into British territory when he was informed of Germany's surrender. The German people were enraptured by his force's exploits, to the point of giving them a victory parade through Berlin so celebrate the only German forces who did not surrender during the war.

Kentucky and Missouri saw a little of this type of warfare, but this was generally disorganized and not officially sanctioned by the Confederate government or military. Even then it created such chaos that vast numbers of troops were tied up defending the Union extreme rear from small handfuls of men with improvised equipment and no outside support.

Sorry if this answer rambles a bit, but I'm running on just a few hours sleep. I just wanted to get my thoughts typed out before I stumble off to bed.