John Kasich running as an Indy defeats his purpose. People like Kasich and "#NeverTrump Republicans" don't just dislike Trump as a person, they take great issue with the influence he's had on THEIR party, a party they were members of and gave decades of service to before Trump ever joined it.
And yet ignored the trends and economics of modern America that gave way for Trump's win. They have no one to blame but themselves. I have been to a few GOP meetings in years past as a volunteer for campaigns and as a member (albeit short-lived) and I can tell you that they bubble is small and increasingly such. They are ignoring the call for moderation time and time again. Kasich would be in that mold and have the country-club economics (which they need to ditch) so it would be a crossover appeal situation.