Livni is arrogant and has an oversized ego and after Peres appointed Bibi to be the PM at least three times she refused his attempts to reach out to her and to form a unity governent. Part of it was about her ego in the thinking if I cant be PM why shoud I support Bibi's government by joining a coalition I do not lead. There was also the fact that she was constantly focussing on the next election Instead of acting like leader of the opposition and criticizing the government when criticism was due she tried the same trick she did when Olmert was inncharge and keep a low profile so she can go into the next election with a whiter than white image whilst Bibi can be criticized because he has been PM. So her priority was not show leadershipit was always my ego and my future at the next election. Mofaz of course wanted to be leader for himself but he was willing to act like a leader and had advised Livni to join unity governments when Bibi offered So Mofaz won this contest because he showed he had what it took to lead and all Livni showed was she cared about herself and not the party and the members held that agaist her.
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Preliminary report: Shooting attack in East Jerusalem's Damascus Gate (Haaretz)
from the article: Mofaz to Livni after primaries win: Your place is with Kadima