He wasn't THAT bad in the TOC ITT, he finished in 14th, just over a minute back!
I do agree though, his focus will be on winning the Tour, and Contador will be just another racer in his way. Actually, better than that, if he can win the Prologue, and be in the Maillot Jaune, or even after the TTT, I think we'll see him try to assert himself as the then de facto leader of Astana, and the peloton, psychologically. I still think there are several things working against him however:
1) Three years off is a long time, no matter who you are.
2) He'll be 38 I believe.
3) He appeared a bit overweight at TOC, but not simple fat, but upper body muscle, which may be harder to lose.
4) There are less TT kms here than when he won his Tours.
5) While a great climber in his day, he won his last 4-5 Tours behind a Postal/Discovery team that set a fast pace over cols on each mountain stage, discouraging attacks and safely delivering him within striking distance of the finish. That's not likely to happen this time with Contador on his team. No way AC sets pace for Lance. He's too competitive, and as Levi said (with affection) AC likes to crush his rivals on the climbs. Others are likely to attack as well, and earlier in stages, often on penultimate climbs, trying to force mano-a-mano Royal Breaks we used to see in days of yonder.
6) There appear to be more aggressive climbers today than when Lance was winning his Tours, guys willing to attack him any chance they can get and isolate him. I'm sure while he's well liked by half the peloton, but even those that like him would love to drop him and have his head on their mantle. I don't think we're going to see a Lance/Cadel Evans dual up the mountain passes, like we did with Lance/Jan, Lance/Basso, etc. More like Lance versus several Pantani's, while...
7) ...Lance hasn't really shown the ability to truly accelerate on the big passes in several years, probably dating back to 2004 at best. When someone else attacks, and AC chases, how well do you think Lance can follow, and keep following?
8) There is less doping in the peloton. Not a reference to Lance, only that it's less likely we're going to see the same 40 guys riding fast up the climbs together day after day, until a few are shed at the end, then come back the next day not very tired and ready to go again. I think we'll see more racing like the last 3 days of this year's Paris-Nice.
Adding to this, peaking is going to be a real challenge, with the Giro and it's big climbs early in the race in early May, and the Ventoux the final climb of the Tour in late July. A climb that while Lance actually rode well up it, said he never liked. And finally, Lance's love child is due in July, which might be a real "distraction". Or great excuse to just head to France for fun, and maybe win a stage and drop out to be with the new baby.