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First of all, the positives. Arizona is demographically trending bluer, mostly because of the growing Hispanic population (and the political gift to the Democrats that will keep on giving, SB1070). The growing Latino population in Arizona is a sleeping giant (and somewhat reminiscent of the one that eventually put Pete Wilson out to pasture in California a couple of decades ago). The trouble is, it's a deep sleep. Between Arizona's byzantine election laws, which closes the window for voter registration pretty early, the voter ID law (another discriminator measure that Arizona did first), and the fact that the Latino population has NEVER punched its weight in Arizona elections (other than the 2011 Phoenix Major contest) colors me as skeptical.
2010 was supposed to be the year that Latino voters would be energized. There was large marches in the spring of that year, energized mostly by Spanish language radio, and SB1070, while it wasn't passed until 2011, was first up on the docket in 2010. It was killed by a combination of a handful of moderate Republicans and the fairly sizable Democratic minority. The Dems put a lot of money into the race, but failed, and failed spectacularly, giving the GOP control of the entire cabinet, and 2/3+ supermajorities in both houses.
Right now, only 2/3 of State House and Senate seats are even being contested by the Democrats. The state party had a bruising race for party chair last year (as well as for Senate Minority Leader), and there were a lot of hurt feelings from that. I really think the State Democratic Party is in a bit of disarray right now, and I'm not sure they can get it together by November.
Still, the biggest factor here is Romney's faith. Arizona is behind only Utah in terms of the percentage of population that is Mormon. Don't get me wrong, not every Mormon will vote for Romney in lock step, but as a voting block, they are very conservative, and they will get behind their own for the most part. And because much of that population is concentrated in Maricopa County (which represents roughly 3/4 of the state's population), he will likely win Arizona even if he loses every other county (and he won't) in Arizona.
I admire Obama for trying to expand the map...and maybe he knows something I don't, but barring a complete collapse by Romney, I don't see it happening this time. Heaven knows I'd like to be wrong though.