I've been wondering about this, particularly since he's publicly ruled out being the vice-presidential nominee. I realized signed up for a conservative e-mail list (to know the enemy), and I recently received a newsletter from Bob Novak. Novak shares the title "Prince of Darkness" with Richard Pearle, and unlike Pearle, he is evil but not stupid. He offers this this theory:
Why is former Sen. John Edwards (N.C.) staying in? He cannot be nominated, but extreme proportional representation by the Democrats means that he could collect hundreds of delegates and go into a deadlocked national convention capable of swinging the nomination either way. There is no doubt that he would swing to Obama. Obama and Edwards are extraordinarily chummy, and important elements of organized labor would like to see Edwards as attorney general in an Obama cabinet.I'm not sure this is Edwards' game, but it's hard to imagine that the possibility hasn't at least occurred to him. On first reflection, I think he could be a superb attorney general.