Latham is perceived as a crude bovver boy unsuited to the dignity and role of high office. He is also very vulnerable on national security, foreign affairs, and relations with the US. Crean was successful as a deputy and headkicker, but floundered when put into the top role; Latham is cut from the same cloth. An unreconstructed Whitlamite who's only job outside hackhood was as a barman, his main asset is his caustic crudity and rhetoric; his attempted forays into serious policy, whilst there, have not grabbed attention or captured spirits.
The ALP remains mired in internal conflict, irrelevancy and a slough of despond. They will not win any ground by appealing to the left, and the right and centre are sown up comfortably by Howard. The ALP need a protracted economic crisis to present any credibility or relevancy to the wider electorate, and there is not one currently, nor on the horizon.
I would not say that there is a population of sleeping Labor voters; perhaps they were so in the early period after the 1996 landslide, but now they have been firmly 'bitten' by the benevolent and great vampires of the Coalition, and have woken to be in that camp. There was a brief waltz with One Nation, but those policy demands and areas have been absorbed by the Coalition quite nicely. They are still way too far to the left for my tastes, but one is pragmatic in that regard.