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Pretty simple.
First, Kerry was an uninspiring candidate. No one was truly excited about Kerry... plenty of people avidly supported him but simply because he wasn't Bush rather than who Kerry actually is. That's a pretty big difference. It didn't turn out well. Lot easier for the Republican's to mobilize churches and far right to turnout for election based on a strong belief in their candidate then it was for the Dem's to mobilize a turnout based on a strong belief against the opponent. That's basic psychology and the Dems took a beating off it.
Second, not a lot of ideas or plans came out of the Kerry camp, relative to past campaigns at least. No one was saying "Kerry got a great plan for (health care/Iraq/economy/etc.). Kerry's camp was all about vague notions and "Bush was awful with regard to so-and-so. We'll be better!!". But no meat to the arguments. Libs seemed to rely more on venom from the Moore's and MoveOn's of the country to sway voters and the mythical youth vote to surface rather than Kerry's merits. That approach failed miserably.
People can whine and complain about the stupidity of the American voters but bottom line is the Kerry the candidate and Kerry campaign itself was really, really poor. Bush was likely the weakest incumbant President in decades and the Dems still failed miserably.
Contrast Clinton the candidate and campaign message versus the much more liked Bush I with this past campaign. You'll find your answer there.
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