Charles Woodson went two picks after Leaf, but everyone knew the Chargers needed a quarterback. There wasn't another elite QB prospect in that draft after Manning and Leaf (Brian Griese, who was OK, went in the third round. Matt Hashelbeck went in the sixth round, but no one saw his career coming).
Taking Leaf at No. 2 wasn't like taking Alex Smith and Jason Campbell instead of Aaron Rodgers, or like taking Todd Blackledge and Tony Eason instead of Dan Marino. The Chargers needed a QB, Manning was gone, and they took a guy everyone thought would be pretty good. Not their fault.
Not only that, it hurt them for exactly three years. They flipped the No. 1 pick in 2001 to the Falcons, who took Michael Vick. The Chargers took LaDainian Tomlinson No. 5, then Drew Brees with the first pick of the second round.
In 2004, they used the extra picks from the Manning-Rivers trade on Nate Kaeding (their kicker for 9 years) and Shawne Merriman (the NFL Defensive Player of the Year in 2006, who was on a Hall of Fame track til he got hurt).
So yeah, drafting Leaf sucked, but they recovered pretty quickly.