A quick scan of the pundits reveals a variety of reasons.
Newsweek's Eleanor Clift blames Bill:
Hillary was doing pretty well on her own until Bill [compared] his declaration that he was against the Iraq war from the beginning. That little bit of revisionist history landed like a live grenade in the middle of Hillary's campaign, exploding a year's worth of positioning to put the Iraq war vote behind her.
Dick Morris blames Hillary:
...the more voters come to know Hillary Clinton the less they like her and the more they get to know Barack Obama the more they like him...
MSNBC's Howard Fineman thinks Hill has been too passive:
Hillary is trapped by her own do-it-yourself feminist ethos. She should have surrogates out there pounding away at Obama [Ed: Huh?] [Bill's] circle is beginning to complain, loudly, about how Hillary is running her campaign. That kind of circular firing squad chatter is the first sign of a campaign headed into oblivion.
Barack Obama claims that panic is a likely cause:
Obama said Clinton's former staffer's comment smacked of desperation.
Newsday blames the Kindergarten Kerfuffle:
...Her campaign has been hobbled by several serious missteps, including an ill-advised effort to portray Obama as a power-seeker who has coveted the White House since kindergarten....
New Hampshire voters say that Obama's newcomer status helps:
Informal interviews with voters yesterday in Concord turned up several leaning toward Obama. Those voters described Obama in much the same way the Illinois senator describes himself: as an agent of change, a new face in Washington... [he] "offers sort of a fresh start, more of a clean slate, less baggage..."
Peggy Noonan also blames staffers:
[She] doesn't actually have an A team, that her advisers have always been chosen more for proven loyalty than talent, that her supporters don't feel deep affection for her. [Her] guru-pollster, the almost universally disliked Mark Penn, has, according to Newsday, become the focus of charges that he has "mistakenly run Clinton as a de facto incumbent" and that the top officials on the campaign have never had a real understanding of Iowa...
Obama's staffers blamed the politics of personal destruction:
...Obama's campaign continued to criticize Clinton for what it said was a pattern of using "gratuitous, personal attacks as a weapon in politics..."
The WaPo's Dan Balz blames a couple of minutes in Philadelphia:
What was it about that exchange over immigration that it now threatens months and months of effective campaigning and a series of debate performances in which Clinton was judged superior to Obama and the other Democrats in the field?
Interesting opinions. Perhaps the real reason is more elemental. Maybe folks just fear someone they think would kill, lie, steal and pillage in order to win.