I believe her arguments go something like:
1. (this is assuming you massage the numbers sufficiently) Won more of the popular vote
2. Won states critical in the General by large margins (CA, OH, FL, MI, NY)
3. Obama's voters would vote Dem anyway, while Hill wins more moderates, independants, and "Reagan Democrats" - i.e., blue-collar white folks and social liberals but defense hawks; thus, she's the better candidate for the General against McCain.
I think point 1 requires a leap of faith and creative counting, but she may actually have an argument with points 2 and 3. The fact that Hill just can't realistically win the nomination at this point, yet is still winning primaries, means the Dems will face a train wreck in the General and don't see it coming. Obama has a lot of problems with the Dem base, the unions, Hispanic voters and the South. Now a lot of the Clinton loyalists and hardcore feminists are pissed off at him, too...not that they'll vote for McCain, but they can withhold money and just stay home in November. The Dems are going to make the same mistake they made in 2004, assuming that no one will vote Republican because of the "toxic brand" thing, as if the choice is "Republican candidate" and "Other". They keep forgetting that Presidential races are personal. You have to sell electorate on your candidate, and they have to like and trust him. Otherwise they'll either vote for the guy they do like or just stay home.
Of course, the cynical argument would be she's staying in the race because otherwise she'll have to pay off the enormous debt she's running. Not to mention the gargantuan sense of entitlement. Deep down, I think she just can't accept that Obama's going to win the nomination, because she's smarter, more experienced and it's my turn, dammit!
PS: Incidentally, i don't know for a fact that the Tracy Flick character in "Election" was inspired by Hillary Clinton. But it would't surprise me. To whit: "You might think it upset me that Paul Metzler had decided to run against me but nothing could be further from the truth. He was no competition for me; it was like apples and oranges. I had to work a little harder, that's all, see I believe in the voters; they understand that elections aren't just popularity contests, they know this country was built by people just like me who work very hard and don't have everything handed to them on a silver spoon. Not like some rich kids who everybody likes because their fathers owns Metzlers cement and give them trucks on their 16th birthday and throw them big parties all the time. No, they don't ever have to work for anything. They think they can just all of a sudden one day out of the blue waltz right in with no qualifications what's so ever and try to take away what other people have worked very, very hard for their entire lives. No, it didn't bother me at all."
a little knowledge I picked up from one of his campaign managers in Pensacola that I know.
