Let's go to pretend world and say the DNC actually has an intact soul. What are they going to do? Somehow rescind/not allow Biden to be the nominee? Then, choose Sanders or someone else?
That would obviously cost them the election for certain. And, taking the moral high ground for a certain loss won't happen (although, this one be one of the more creative ways they've found to fumble away an election).
I don't think it's too late for them to find a new nominee. Biden hasn't even got all of the delegates he needs to secure the nomination. Here's what I would do.
1. Force Biden out, of course we know the DNC and Tom Perez are jellyfish, so this won't happen.
2. I would reopen the process to any candidate that appeared on any ballot. Dropped out before Iowa, sorry bout it.
3. DNC would then work with every state, including ones who have had a primary or caucus. Give the state the option of letting their result stand or to redo the results based on all of the candidates they voted for being out. If a state keeps their result, Biden, or whatever other candidate who chooses to stay out just wouldn't count.
4. Set up mail in voting in every state who decides to hold a primary.
5. Since there won't be a convention anyway, do away with super delegates.
6. Plurality of votes wins the nomination.
Voilà