Did it? Or did the Third Party/Nader key switch on him? And Gore won the popular vote as well.
That's probably how I would have explained it away, had I been in Lichtman's position. His other option was to acknowledge that every single academic predictor got the election wrong (some had Gore winning by double digits), so obviously there was an unconventional dynamic involved in the election (e.g. character, social issues, etc.).
But Lichtman's actual excuse is awfully lame. To suggest that his system is so finely tuned and has such a small margin of error that it could discern a few thousand uncounted ballots in a single state is preposterous.
The third party did exactly what he said it would- namely pull in about 2.5%.
And his qualifications about the popular vote are new; he hadn't been claiming it before.
He was wrong.
The reasons could be that the economy switched on him, that he underestimated charisma, that his system just didn't work this one time, and/or that his system has no predictive value at all. Any combination thereof.