Hillary doesn't want to run for president in 2nd or 3rd gear. It's beneath her dignity. And I don't mean that sarcastically. It really is. She's a powerful United States senator, former First Lady, etc. She wants to win. And if she's still in it she wants to run full bore with the money you need to run a serious campaign, the crowds, poll numbers, etc. She's not some Huckabee figure who's going to hang around with little chance of winning
It really is all or nothing. You've got to convince your supporters, donors and to at least some degree the media that you're really in it, and in it with a shot. Otherwise you face the classic problem of a cascade failure. Poor fundraising generates bad press stories, which depress turnout at rallies, which create more bad press stories and eventually no press stories, etc. It's no different from the precarious position any campaign faces when the odds aren't looking good.
And so we have this vicious cycle in which the longer Hillary's odds become the further she has to up the ante to keep her candidacy credible -- in other words, the more forcefully she has to question the legitimacy of the nomination process and the more aggressively she has to push the idea that Obama can't win the general election or is not qualified to be president. (For example, the argument that the Clinton campaign now appears to be making to funders and the press is that Obama literally cannot win the general. And thus she's not only entitled but actually obligated to do whatever it takes to ensure that he's not the nominee.) Without making real progress on one of those fronts, the premise of the candidacy just becomes too difficult to sustain.