Manuel hasn't given up on him, because he thinks we'll need him to be that great closer that he was when we get into the playoffs. Considering that we have Madsen in the bullpen, I'm not quite as worried. It makes sense to try to get Lidge to redevelop his confidence now, if at all possible. The Phillies would be better off if they had both he and Madsen in there as reliable stoppers.
Since the Phillies have a commanding lead, they can afford to take a risk now and then to try and get some of their less effective players into a groove. In truth it's the Phillies sporadic offense that's been causing Phila. problems more than their pitching. If they were producing runs, they could put Bozo on the mound and still win!
The starting pitching has been great, and as long as they can produce runs they are practically unstoppable. They have so much depth that they could put Martinez into the bullpen with Moyer, and still have a 4 man rotation with Lee, Happ, Blanford and Hamels. But they still need someone to be an absolute stopper when the game is close at the end, and that has to be Lidge or Madsen.