Actually, if another person who is popular with the more conservative primary voters also throws their hats into the ring, it gets that much easier for McCain
If it's just Allen and McCain, McCain would get crushed, but if you have say Frist, Allen, McCain, maybe Huckabee or Sanford, then you are looking at situations in which any given winner, at any given time, could be taking the primary with under 40% of the vote.
The first primary is the money primary, not the Iowa caucuses or the NH primary.
Allen is seeking to crowd out all other conservative hopefuls, just as Bush did in 2000, so that they drop out prior to Iowa and/or NH.