Why did it fail? The answer to that is simple: the United States is a Republic. One Congressman observed that the mail and calls coming in were a thousand to one against. When the Vox Populi is that loud and clear, it is very hard for our representatives to ignore it.
Why was the bill so unpopular with the Populi? The answer seems to be that it was widely perceived as an enormous expenditure of public money, which it probably wasn't, on behalf of a bunch of fat, greedy, money changers, which it was [Ken Blanchard, "Gray Monday," South Dakota Politics, 2008.09.29].
I'm still trying to figure out which is the greater courage: to face down the dire warnings of calamity and stand against bad legislation (we could've used more of that spirit seven years ago against the Patriot Act) or to vote for unpopular yet necessary legislation. (Readers, care to help me sort that out?)
Even in the face of great public opposition, Congress and the Administration may still need to bite the bullet and take serious action. As Blanchard notes, if there is a financial disaster brewing (and Wall Street, both Presidential candidates, and most of Congress are hollering that there is), it doesn't matter if we don't like the greedy scumbags who started it. Something's got to be done...
...although I am curious: how much longer can Washington delay before someone looks up and says, "Hey! We've waited a week/ten days/two weeks/a month, and the world hasn't ended yet"?