The Democrats said that in 2004 about Bush. Then they went and nominated John Kerry. The GOP's chances in 2012 will also depend on who they nominate.
I agree, of course, that the degree to which we will beat Obama will depend on the GOP nominee. But I really see Obama's chances as very weak, largely because his base has crumbled and I don't see how he gets enough strength back there to be a strong contender. I'm more worried about Hillary at this point.