I'm find Conan's irreverent humor a lot more fitting for the latenight audience. Jay Leno has more of a primetime sort of humor than late night though. Its just politicking now, like what NBC did with Letterman when they had to pick a host Late Night.
They picked Conan, and for the first few weeks, Conan was having a hard time loosening up to the crowd (him being a comedic writer, first and foremost)
If NBC stuck with Conan for the longest time in the Late Night spot, even letting him continue after the first year wasn't all that good, why are they blackballing him now on the Tonight Show... The reason CBS and Letterman is leading on the particular timeslot is that viewers are hesitant about a new host and new viewers are just getting used to Conan being in Leno's shoes.
But then, its a network decision. Its just a shame how NBC treats other assets in their company aside from their big stars and shows.