So... Palin needed about 6k votes, but Begich voters didn't put down Palin's name for over 8k votes. Reasons for such could be:
1) Not caring whether Palin or Peltola wins.
2) Thinking Palin will win anyway.
3) No understanding how the vote works.
If they wisen up and vote smarter in November, it's not inconceivable that Palin can get enough second votes to win.
Are second votes of Palin and Peltola voters counted at all?
You forgot:
4) Despising Sarah Palin.
A lot of Alaskans deeply resent her for abandoning her elected position to enrich herself as a celebrity talking head on Fox News. She was halfway through her term as Governor when she walked off the job. And even when she was here, she stayed home in Wasilla (probably because her husband refused to take care of the kids) and collected the per diem the State gives to employees who are working away from their regular duty station, which in her case was the Governor's mansion in Juneau.
She disappointed a lot of people, moved to Arizona years ago, and only showed a renewed interest in Alaska politics when she saw an opportunity to be elected to Congress.