You're right, but the media is so enamored of Dean that they'll give him a lot of cover while he proves time and again that he's in way over his head.
The problem with the other candidates is that Dean has sucked up so much of the oxygen that they just aren't strong enough to take him on. He has stumbled somewhat as of late, but he's still running rings around the other candidates in terms of money and media buzz. Kerry especially realizes this, which explains the almost hysterical tone he's taken in attacking Dean.
Kerry CAN still get back into this thing, but he's going to have to win New Hampshire outright to do it. Problem is, he already down by double-digits to Dean, so he has to make up a lot of ground in a small amount of time. Kerry's mulling of skipping public funds (which he has to do now, or he will in effect declare that he's not serious about clsoing with Dean) is his acknowledgement of this.