It would be an uncomfortable situation, but it's vastly preferable to a decade or more of economic turmoil. Not to mention the probable loss of Scotland, huge questions about the Irish border, etc etc.
I don't think any retreat would have ever been politically acceptable. The general public saw through the "hard/soft" Brexit angle, it was clear that remaining in the single market would not have delivered the majority of leavers wishes.
Worse still, this heavy push on "soft Brexit" made the perception that certain sections of the establishment was trying to deceive their way out of the vote stronger. This sort of feeling, that outside powers are pursuing objectives against our wishes, was a strong driver in the ref vote.
Well, with a 52:48 majority for leave and with almost all Remain voters probably preferring "soft" to "hard" Brexit, it would only need to satisfy a tiny % of leavers for it to have more a mandate than the "hard", no-deal Brexit cliff edge the government seem determined to steer us all over without any debate.
What if 'leave' won that referendum by an even larger margin?
Before you think it couldn't happen, bear in mind that the whole mess was started by someone calling a referendum they clearly thought they'd win as a way to shut down political opponents who wanted to 'leave'.
That didn't exactly work out the way he expected, and there's no reason to believe a second referendum would work out any better - especially since the pendulum swing is currently swinging hard against globalism.
That would be good. A clear majority on a concrete plan indicates what the voters want, if it's leave then be it. That's way better than a vague 52:48 on some vaguely formulated question where there is a magnitude of possible ways to go, from "soft" to "hard" brexit.