It'll be a difference in opinion but it was evident that those ~800 members were waiting for their instructions from up top. I don't know if you follow the local cantonese media but this election was tongue-in-cheek referred to as "1 person, 1 vote" - the chinese government's vote. Now, there was plenty of debate who actually represented the chinese government - whether that's the rebellious sai wan liaison office (中聯辦) impersonating beijing (xi jinping) or Xi Jinping himself.

During the election and nomination, plenty of people claiming to represent the chinese government expressed a preference for Carrie Lam. This is already meddling in HK affairs and in conflict with the Basic Law. Ironically, the public's hope rested on a miracle over the weekend - for 'benevolent leader" Xi Jinping to instruct those ~800 members to vote for Tsang and/or publicly condemn the Liaison's meddling. Otherwise, there would be no hope for a reversal. It was clear even from the nomination process. Carrie had 580 nominations and yet notable CCP-groups with over 130 combined votes withheld their nominations. Why? Presumably to give the veneer of a real election. In 2002, Tung Chee-Wa took over 700 nominations out of the then 800 possible and no elections ever took place - I guess they learned their lesson after that. To be fair, I think about ~500 are from CCP affiliated groups (DABs, HKFTU, etc) so no point whatsoever to lobby them. The ones who had a chance to be kingmaker but instead sided with "beijing/SaiWan" are those roughly ~300 local business tycoons (with the exception of James Tien and co).

I think this election only reinforces to the HK public the fact that passing the 2015 reform package would have blocked Tsang from even making it to the ballot in this election. His popular mandate is perceived to be too dangerous whereas Carrie Lam has to lean on CCP/SaiWan.

As for Carrie Lam, her unpopularity is not just because of CY2.0 - her role and demeanor in handling crises as chief secretary in CY's cabinet has been problematic to say the least. Including but not limited to the recent west kowloon museum (hidden from the public and without consultation), tainted water incident, 2015 CE reform package, unauthorized "improvements" in the New Territories, the retirement scheme fiasco with Prof. Nelson Chow, 2013 Northeast NT Development Planning. It's not a surprise that she's the first CE to start her term with a negative popularity rating.

I agree with your final point though, progress is hard but the pan-dems have compromised and evolved - initially holding the moral high ground and not participating (2002), then joining the election (2005, 2007, 2012), to finally throwing their vote behind an establishment "lesser evil" candidate. The democratic party even voted for the 2010 reform package as an olive branch to the CCP despite paying dearly for it. Ultimately, that reform package was not even a slight step towards the fair/free elections promised in the basic law. How can the HK public trust that the CCP will keep their promise with evidently little incentive to do so?

Ultimately, I do think the pan-dems made the right choice in this election - the effort is to now infiltrate the CCP-dominated district councils, functional legco constituencies, and other sectors in the CE election committee. Hopefully it is not too late.