Character does indeed count, Quin. But I'm afraid I remember how far character arguments got Republicans against Bill Clinton in 1992 and 1996. It was well summed up by Bob Dole shouting ineffectually, "Where is the outrage???" In the end, we get the leaders we deserve.
I think there is a very good reason Republicans are going to be hesitant to admit defeat and particularly demoralized when it likely comes: The last time the GOP pitted a grumpy septuagenarian against a charismatic young Democrat, there was never really any hope of winning. Bob Dole never led Bill Clinton during the thick of the 1996 campaign -- though he did in some 1995 polls -- and was frequently down by double digits. After the 1992 Democratic National Convention, Clinton enjoyed a pretty consistent and occasionally formidable lead over George Bush the elder.
Barack Obama has generally had pretty narrow leads over McCain in national polls and, before his spending advantage and the Wall Street mess, had trouble closing the sale in the battleground states. A few national polls show Obama with a less-than-imposing single-digit lead now. Worse, McCain actually led Obama after the Republican National Convention and the Palin pick. There was a point not too long ago where even hardened McCain skeptics like myself thought the Old Maverick might pull it off.
When I was in Pennsylvania a few weeks ago covering the primary there, I spoke to a man who could be described as a classic swing voter. While he was leaning toward Hillary Clinton in the primary, he said he'd reevaluate his choices in a general election. When I asked him what the most important issues were to him, he mentioned bringing troops home from Iraq, which you'd think would put him firmly in the Democratic camp. But he said he'd be perfectly willing to vote for John McCain in November. He described how, no matter what the candidates say, they aren't going to be able to just pull out right away, it may take a long time. And he noted that McCain was quoted out of context with his "100 years" comment, and said perhaps McCain's right that we'll have troops there for decades like in Korea.