I have no reason to doubt John Heilemann's account of Obama's two meetings with Elizabeth and John Edwards after Edwards ended his campaign. But, like Mike Allen, I'm skeptical that that's the reason Edwards hasn't endorsed Obama.
But now two months have passed since Edwards dropped out—tempus fugit!—and still no endorsement. Why? According to a Democratic strategist unaligned with any campaign but with knowledge of the situation gleaned from all three camps, the answer is simple: Obama blew it. Speaking to Edwards on the day he exited the race, Obama came across as glib and aloof. His response to Edwards’s imprecations that he make poverty a central part of his agenda was shallow, perfunctory, pat. Clinton, by contrast, engaged Edwards in a lengthy policy discussion. Her affect was solicitous and respectful. When Clinton met Edwards face-to-face in North Carolina ten days later, her approach continued to impress; she even made headway with Elizabeth. Whereas in his Edwards sit-down, Obama dug himself in deeper, getting into a fight with Elizabeth about health care, insisting that his plan is universal (a position she considers a crock), high-handedly criticizing Clinton’s plan (and by extension Edwards’s) for its insurance mandate.
Again, it's entirely possible that this happened. Still, my sources said the reasons Edwards didn't endorse Obama shortly after dropping out were as follows:
Edwards likes Obama personally, thinks he really intends to change the status quo, but isn't convinced he's ready to be president* and has concerns about whether he's tough enough to take on the GOP. (I'm told the second concern looms larger than the first.) On the other hand, Edwards is lukewarm on Hillary personally, doesn't think she'd change much of anything, but thinks she'll really pummel the GOP. As for Elizabeth, it sounds like she's just as conflicted. I've heard she's even more down on Hillary, but is also impressed by Hillary's willingness/ability to kick GOP ass.
Reading between the lines, I got the impression Edwards's calculations were mostly dictated by--surprise!--self-interest. Early on, he wasn't sure Obama was tough enough to beat Hillary. Or to reassure voters and superdelegates that he'd be able to win the general. And what good does it do you to endorse a guy who's going to lose?
Since then, Obama's obviously become the favorite to win the Democratic nomination, which has changed Edwards's calculus. The risk is no longer endorsing a guy who may lose. (At least in the primaries.) It's that you won't get credit for helping Obama win. Endorsing Obama at this point would basically mean jumping on a bandwagon, and there's no percentage in that. So I'm guessing Edwards is biding his time until there's a moment when his endorsement would matter--for example, when it could help bump Hillary from the race. (Say, after a loss in the North Carolina primary.)
For what it's worth, I do agree with Heilemann that the problem for Democrats who want the primary over soon is that there just isn't anyone out there with the stature or credibility to tell Hillary to quit. That is, except for her own supporters. Which, as Heilemann says, could be the ones who ultimately nudge her aside.