Even if he did win (although it is pretty certain that the Iranian elections were rigged, to what extent and how it changed the outcome still isn't entirely clear), chances are that it would be a pretty close election. He wouldn't appear to command quite enough popular support to present a challenge to the Supreme Leader, who would feel quite comfortable running roughshod over the wishes of the president.
As has been pointed out in the thread, moderation on the part of the Iranian president doesn't always end well. It takes two to tango in terms of detente, and the Bush administration was not in the mood for any kind of understanding with Iran.