I think Kejriwal's decision to fight from Varanasi can result in doom for his own party:
1. There is no way that he can beat Modi, instead he will have to confine himself to Varanasi to give Modi a tough fight while only 2 rallies of Modi there would be enough to ensure comfortable victory.
2. Kejri remaining confined to Varanasi means that he cannot freely move across India to garner votes for his party as he is the only leader of AAP that people know (if they know any), thus minimizing the no. of seats that his party can get.
3. The most solid chance of getting seats for AAP was in Delhi where candidates like Ashutosh & Khaitan has ensured that they will infact lose.
4. Also, I get the feeling that when the Delhi Assembly elections take place again, AAP will be losing credibility on two counts - resigning in just 49 days + Arvind himself losing LS elections, add to this if BJP projects Kiran Bedi for CM from Delhi, it could pay huge dividends for BJP (as it is people will be more inclined since BJP will be in center as well).
My Prediction - AAP will be reduced to < 8 seats in LS.