The Sanders phenomenon
That being said, there are two important points to keep in mind.
1) If Sanders did win the nomination, there's a huge risk of his losing the general election. Almost every poll of Hillary* vs. any Republican challenger shows her beating them all by margins ranging from comfortable to crushing (here's the RCP average). Few polls have tested Sanders against possible Republican nominees, but in all those I've seen, he loses. The very thing that endears him to our own side -- his fire-breathing clarity on the issues -- would make it difficult for him to win in a country still allergic to terms like "socialist" and some of the positions that go with it. As I explained here (see end of post), Hillary is unique among Democrats in being considered trustworthy on national security -- an issue on which, however unfairly, we badly trail the Republicans.
And the risk of a Republican becoming President is one we dare not take. It would mean the destruction of everything Obama has achieved -- Obamacare itself, for starters. Then there's the Supreme Court, whose importance has so recently been made clear. If Hillary becomes President, eventually Scalia will be replaced by another Sotomayor or Kagan, perhaps even by Obama himself. If a Republican becomes President, eventually Ruth Bader Ginsburg will be replaced by.....another Scalia.
2) Sanders is not, in fact, posing a serious challenge to Hillary to win the nomination. That may happen in the future (though I doubt it), but it's not happening yet. The impression that it is happening rests on three things: his strong polling results in New Hampshire, a straw poll in Wisconsin where he only barely lost to Hillary, and the large crowds he's been drawing while giving speeches around the country. But New Hampshire is a neighbor of Sanders's Vermont, in a part of the country where states are small; he's practically local there. Straw polls mean very little; this year major Republican candidates skipped their party's Iowa straw poll, citing its very poor record of predicting the eventual nominee. As for the crowds he's been drawing, these are largely in places which have a lot of people significantly to the left of national Democrats as a whole, such as college towns. The liberal blogosphere is excited about him, but the liberal blogosphere, too, is significantly to the left of the rank-and-file base of the party.
The reality of the situation is that among Democrats nationally, Hillary still has a huge lead. The most recent poll I could find has her at 55% to Sanders's 13% (and Biden's 14%). Right now the RCP average has her at 62.8% to his 14.3%. Here's a breakdown of their support among various sub-groups of Democrats (graphic from Jobsanger) -- the lead varies a little between groups, but every group hugely favors Hillary. This analysis at Horizons is also worth reading.
In reality, I think both of them realize this. Both have refrained from personal attacks on each other; she'll need his enthusiasts in the general election, and he (wiser, in this, than some of his supporters) doesn't want to risk damaging the eventual nominee and helping to elect a Republican. As long as things stay that way, Sanders is performing a valuable service by getting explicit socialism out in front of the public in a high-profile, plain-spoken, and appealing way. He may well contribute to moving the Overton window, giving Hillary as President more freedom of action and paving the way for a more liberal successor. But it is Hillary that's going to be President, and bloggers who are trashing her now for one reason or another need to know that they are helping only the Republicans.
[*Again, I mean no disrespect to Hillary Clinton by referring to her by her first name. I simply consider it clearer given the fact that there is another major public figure (Bill Clinton) with the same last name. Her own campaign often does the same.]