The issue for Democrats is not who is the more progressive candidate, but which style of leadership they think will be more effective. Sanders presents himself as a transformational leader and Hillary presents herself as an incrementalist. FDR was a transformational leader, and so was Ronald Reagan. Bill Clinton, Barack Obama, and Hillary are, or were, incrementalists. FDR and Reagan were transformational because during their presidencies the fundamental rules of the game were changed. They were changed in very different ways, but neither accepted the status quo as normative, and both changed the rules that dominated the American political ethos for several decades following their presidencies.
That's the main difference between Bernie and Hillary. Bernie believes that you need to change the fundamental rules of the game, and Hillary believes that the basic rules are ok and that "progress" can be made within their framework. That's why Bernie in the debate tonight wasn't attacking Hillary so much as he was attacking the system. His "artful smear" wasn't to insinuate that she's knowingly corrupted by the money she takes from the banks, but that she's comfortable working in a corrupting system in a way that he's not. That's what makes her the more establishment candidate.
It's obvious that she is the more establishment candidate, and most progressives understand that no matter how strenuously she tries to defend her progressive bona fides. Obama isn't a real progressive, either, even if Bernie isn't allowed to say it because to do so would be to shoot himself in the foot. Both Hillary and Obama are more Neoliberal than they are real Progressives, or they both at least accept Neoliberalism as normative. Neoliberals sometimes do progressive-ish things, but they are not real progressives precisely because they accept Neoliberalism as the framework for doing business. They seek to mitigate its harsher symptoms, but not to cure the underlying malady.
So I think this plays out for either Bernie or Hillary depending on which leadership style--Bernie's or Hillary's--most Democrats think is more likely to have a positive progressive impact. I suspect they'll play it safe and go with Hillary. But I would argue that a transformational leadership style with the right transformational leader has the potential to get significantly more done, or at the very least to lay the foundation for something to get done in the next decade or so. Bernie might not get much done in the way of concrete policy, but he will change the underlying political infrastructure in a way that will prepare the ground for someone like Elizabeth Warren to succeed him, and it might be she who builds on what Bernie started, and Bernie would give her far more to work with than Hillary would do.
So while I have yet to be convinced that Bernie has what it takes to be more than a wannabe transformational leader, I probably never will be convinced beforehand. We can't really know beforehand. But conventional wisdom about potential transformational leaders is almost always wrong. It was wrong about Ronald Reagan, and what I learned from Reagan (and W too) was that it wasn't important to take him seriously as an individual, because it wasn't he so much as the people who came with him that made things happen. And so that will be true of Bernie, too. He's not going to work with the Rahm Emmanuel or Larry Summers types that Hillary is more likely to work with. So you're not just choosing Bernie or Hillary; you're choosing the people who will come with them, and the differences there are likely to be very significant.
One of Bernie's better lines was to concede that he doesn't have Hillary's experience in foreign policy, but also that he doesn't have her bad judgment. Experience is important, but good judgment is more important. And when push comes to shove, on all the broader issues, whose judgment do you trust? That's the real question Democrats have to ask themselves. Electability is, imo, a chump criterion. Bernie is as electable as Hillary against the current crowd of GOP crazies and empty suits. The 'socialism' thing is something I think he will be able define on his own terms, despite what the GOP will try to do with that. It's part of the way he's gong to change the rules. The bottom line is that he makes sense, he's consistent, and he's for real. That's what Americans will want to elect, for a change.
His candidacy is still a long shot. But I think it's possible that he could be the kind of seventy-something leader for the next decade that Reagan was for the eighties. Although I'm not completely persuaded he can be, I'd rather give him a chance at it than just have a politics-as-usual leader like Clinton and her crowd running things.