Yeah, there's every reason to believe that this will be very close and no reason to believe that Kelly can't win. He came very close to Giffords last time even though he's nuts and Barber doesn't seem to be anywhere near as popular as Giffords was, even absent the supercharged Republican 2010 environment.
The Democrats have lost 10k voters in this district since Oct 2010.
Oct 2008
D - 148K
R - 161K
O - 113K
Oct 2010
D - 140k
R - 159K
O - 125K
April 2012
D - 130K
R - 156K
O - 124K