It'd be strange, I think you'll agree, to run for the top political office in the country after doing that. But even if he did run, he would not get anything above single digit percentage of support, basically some particularly liberal part of liberal elite in Moscow and Saint Petersburg.
I think a lot of people (myself included) sympathise with his anti-corruption work, even though it has zero effect. But even the sympathizers know that politically he has zero prospects in any high level election there even if everything was fair and square (which it is not). The West, on the other hand, is gaslit into believing that he's Putin's arch-nemesis or something, and Putin is losing any sleep over his existence or activity. As they say in Russia: as a dog barks, the caravan goes on.
Here's another thing people in the West don't know about him: he's a nationalist and a xenophobe (he shares that with most Russian people, but he's considerably more extreme in his views), but I wonder if his curators from USAID know that. Here he is in 2011 speaking from the stage at a nationalist Russian March: https://youtu.be/BYMbYwL8sQA?t=511. To US folks, this is like Charlottesville, but without the opposing side. "Jews will not replace us" and everything. Plenty of "skinheads" in the crowd. You only don't see swastikas there because they're illegal to show in Russia.
So TL;DR: Navalny is a complicated man at best. And he's not, and will never be Putin's "rival".
He us working hard to make you believe that.
Everyone agrees that he serves as a bad example to follow.
So yes, first hand knowledge may fail you.
PS. I always vote against him every time he runs. I think there should be term limits, and I didn't "get" him early on. His results are hard to argue against. At a very minimum (and unlike in the US) the oligarchs don't overtly own the parliament (duma) anymore, and the standard of living has improved massively.