Danilo was beloved by long-time PLD insiders, but was not so well-known by the public at large and as Chiri says, was not an exciting campaigner. Jaime David was far better known and recognized (and actually pretty well liked), but many of the PLD faithful did not trust him because he was not originally PLD. And perhaps Chiri is correct, that Leonel worried it would make Jaime David too powerful in the party...
Many in the PRD were determined to see their party win in 2000 regardless of who their candidate was, because they had been out of power so long and because they felt like Balaguer robbed Pe?a Gomez of the win in 1994 through electoral fraud and again in 1996 by throwing PRSC support behind Leonel. I was still living in SD as the campaign 2000 began, and there was much "do it for Pe?a" talk after his death. And Hippo claimed to be Pe?a's chosen successor...
Another factor: Balaguer refused to put his party's support behind the PLD in 2000.
Another factor: PRD & PRSC rank-and-file were not happy that PLD did not "share the spoils" during Leonel's administration. Reformistas particularly seemed angry that they got nothing tangible (i.e., $$$, botella jobs, etc.) as a result of their support for Leonel during the election. Much of the "come solo" talk started because of this.
Another factor: Hippo played heavily on the "I am a man of the people" theme, saying how he talked like them, thought like them, understood them, and arguing that Danilo, like Leonel, was an aloof intellectual that did not connect at all with "real Dominicans." And people thought Hippo's colorful language was just that, colorful language, and not an indication of mental deficiency.
Another factor: Dominicans did not fully appreciate what they had in Leonel at the end of his first term in office. Sure, had missteps, he botched the privatization of CDE, some in his Administration were corrupt, and I still disagree with the hefty pay raise he gave himself as his first action upon taking office, but he did alot of good. The average Dominican did not really appreciate how much good until Hippo destroyed it. As the song says, "Ain't know whatcha got 'til it's gone..."
Another factor: Hippo campaigned hard in rural zones, saying that he was a farmer and understood how agriculture had been hurt by Leonel and he would be their man on the inside, that he understood "the DR outside of Santo Domingo" (as I heard him say in Duverge), whereas that city-slicker Danilo never could...that pitch works in the hinterland.
Another much rumored factor: drug money supporting the PRD campaign.