I think it’s more likely he’d run for Governor, he could conceivably win that. I’m not worried about Lee, should I be?
It’s hard to underestimate how much the establishment loathes him (and Ted Cruz). Lee is a top target, and they’ve already got primary challengers lining up (Bridgewater, the guy Lee beat after taking out Bennett). There was another FReeper here, whom I can’t recall their name, that was raising the alarm bell here about Lee being a premier target and that Matheson figured into their plans (if they can’t primary Lee).
Matheson retired because he knew he would lose a 2014 rematch against Love (he only barely won in 2012, so it was clear that the jig was up). I don’t think that even Matheson believes that he could win a U.S. Senate election in Utah. The UT-04 is 5% less conservative and Republican than UT as a whole.
As for running for governor, I guess anything is possible, but it would take exigent circumstances for any Democrat (even Matheson) to be competitive in a gubernatorial election in UT.