This was a reaction to a different race: one in a different state for a different office in a different part of the country and for a different party, but this is as good a summary of the problems of not working with the netroots early as possible:

If a campaign doesn’t engage the New Media early on, there will be three major problems:
1) Unfavorable frames and narratives will be free to develop in the media seed-bed of the blogosphere. Once developed, they become conventional wisdom and are very difficult to rebut.
2) The campaign will sacrifice the opportunity to develop their own narratives, or to frame upcoming issues for the Influentials.
3) Once the campaign does enter the blogosphere, they will face an uphill battle to cultivate credibility, interest, activists and notoriety.

I doubt better netroots engagement would have been enough to save Allen. The preponderance of evidence that the guy was an out and out racist only increased over the course of the campaign. That’s a tough thing to un-spin no matter how many people you have trying to make the case for you.
Similarly, in retrospect, of course it’s terribly unlikely that netroots outreach alone would have been enough to overcome both the structural advantages that Schwarzenegger had (like $45M of free earned media) and the series of strategic errors and missed opportunities that Phil’s campaign was unable to successfully navigate. But campaigns are complex systems: they have to hit on all cylinders to run, and this was an unwise area to neglect.
The Angelides camp’s official excuse for putting zero effort towards not doing this was that they couldn’t afford it. But this rings a little hollow for two reasons. First, any campaign that’s willing to spend $30 million + – in a primary – on TV ads isn’t strapped for cash. Netroots outreach isn’t fantastically complicated: I mean, we want to be reached! Even someone part time could have pulled together a blogger list and started talking to folks. Second, this isn’t captured in the above three points, but a strategic direction for a campaign that takes the netroots into account is going to be cashflow positive. A small donor base may not be enough to fund megabuck TV ad buys, but Phil (for example) could have easily sparked enough interest to get a small donor base going that would have paid the way of the netroots coordinator and then some.
Hopefully this won’t be a discussion we’ll have to have for future candidates in this state.