If it's a bad year for Schwarzenegger, it's kind of hard to see how McClintock would win anyway. If it's a good year for Schwarzenegger, the alliance could work to McClintock's benefit.
It's a missed opportunity. Had it gone through, he could begin to rebuild his image as a bipartisan problem-solver. He can still do that, but as the year wears on, partisan conflict will make that harder.