It wouldn't have been that bad if more voters picked Thompson and I think even Romney, much as I'm not a fan of him, would be more competitive with Obama/Clinton than McCain or Huckabee.
There are only two candidates who were sitting VP’s during an 8 year or more administration who won a general election. The first one was Truman who had an incumbency advantage because of Roosevelt’s death. The other VP was George Bush I who of course was elected because of Ronald Reagan.
If we had a terrific candidate, it would be an uphill battle and maybe winnable. However, McCain is not a good candidate, and we will surely lose in November.