It's the economy, stupid.  The economic crisis leaves McCain with nothing but bad options.  They are:

Try to distract people by making them scared of Obama as President.  This won't work.  You can't scare people by telling them there might be a bogeyman in their basement when a real bogeyman is tearing up the entire rest of their house.  Worse, if you try to do this, it just makes you look ridiculous and reinforces the image of your being 'out of touch'.  Which is why Obama went up in the polls when McCain did this.

Try to actually deal with the crisis.  McCain tried to do this with his plan to buy up mortgages, but it was both intellectually and politically unsound.  It was intellectually unsound because it didn't address the liquidity crisis, and it was politically unsound because it was essentially a left-wing type of proposal.  Republicans didn't back it because it was against their principles and political self-interest, and Democrats weren't about to embrace anything from McCain.  He has a real problem here.  Democratic-type proposals won't work politically, and Republican-type ones just won't work. 

Actually dealing with the crisis would be his best move but unfortunately for McCain he doesn't have the resources, either political or intellectual, to do it.  The crisis was created by a lack of regulation and McCain and his advisors are people who have always believed that a lack of regulation was good.  Now that their economic belief system has been proven wrong, they have nothing to offer. 

Pretend to deal with the crisis.  Been there, done that, screwed the pooch.  McCain tried this when he suspended his campaign in order to go on a mad cavalry charge to Washington to save the day, canceling the David Letterman show in the process.  Unfortunately what he actually did was hang around NYC to do interviews, which caused Letterman to destroy him, then go to a Washington summit meeting at which he did nothing, after which his party shot down the only plan on offer and caused a market crash.  Brutal.  Let's not do that again.

Deal with a small piece of the crisis and act like you're dealing with the whole thing.  Interestingly, this is something McCain does a lot.  He constantly brings up being right about the surge, even though it also brings up the fact that he was wrong about the whole war.  He talks a lot about having tried to regulate Fannie Mae and Freddie Mac, but that's just regulating two companies that most people never heard of, ignoring the rest of the economy.  And it's the entire economy that's falling apart.  It's like blaming a tidal wave on the fact that two beach houses weren't strong enough.  Now he's touting a plan to let senior citizens delay mandatory withdrawals from their IRAs.  Decent idea maybe, but it won't stop the financial crisis.  (Related Psychology Fact: When people are administered the Rorschach Inkblot Test, some subjects only focus on small parts of the inkblot and see things there. These people are almost always highly anxious.)

What the McCain campaign has actually done has been to flail about frantically while they try all of these strategies and find that none of them work.  Often the most difficult decisions to make are those that involve choosing the least bad alternative.  People with a high degree of entitlement often respond to situations like that by refusing to believe that all their options are weak and they just have to deal with it.  Instead they insist that some option must be guaranteed to work, and get angry at everyone else when it doesn't.  In this regard the McCain campaign truly is carrying on the Bush legacy, and that's the biggest reason of all why they won't win.