Another thing is that the MEDIA only talked to the Chicago people, and went all out trumpeting it as a lock and that it was because of Obama, whose wonderfulness in Copenhagen would be the icing on the cake.
He was undone by his sycophantic media as much as anything.
Quite satisfying, at least to me.
I should point out I live in the Indianapolis area, and having an Olympics so close would have meant my grandkids could attend. It also may have meant some tourism and jobs for northern Indiana, although in that case I am pretty sure Daley would have wanted to keep everything within his influence. I didn't ever think it would happen, though, for the reasons you described.
The Chicago people were incredibly naive, which is actually helpful to us. It shows their vulnerability to navigating in political waters they aren't familiar with, and therefore shows that a campaign which is unconventional may get them so flustered that they can be beaten.
I don’t know if you had an opportunity to view or read the transcript of the Obamas’ presentations to the IOC, but they were an embarrassment in so many different ways, not the least of which was Obama again demeaning his own country. And of course, both Obama and his wife had to make it all about themselves.