She was a bad choice. Picking her was clearly an attempt to gather Hillary supporters, but they didn't count on Palin being so unqualified for even a VP position. The Republicans took a gamble and lost. At best, she did not increase McCain's numbers at all (an initial boost followed by a big slump after a few public appearances). At worst, she has actually decreased his popularity because she makes it much easier to question his judgment.
I think it reflects McCain's opportunist nature. He's not looking out for the nation, he's looking out for himself. This is why he has lost so much respect for centrists across the nation. When he decided that he'd make a presidential run, he sacrificed his principles and took the steps necessary to secure himself as the Republican nominee, steps which included a descent into insane neoconservative politics and promoting the Bush doctrine. In the end, his flip flopping just shows that he's an opportunist, nothing more.