As sometimes happens, this is a question where the literal question and subtext are a little different. To address the subtext: Relax. You don't really know what the situation is, and you're not going to benefit from trying to guess about it. They wouldn't interview you if they didn't think you were competitive. Of course, the downside of that is all the other people they'll interview are competitive as well. The start of December is still pretty early for interview invitations, so just because you only have one invitation now doesn't mean you won't get more later.
To address the explicit question: I know from the applicant side it must feel like the market is such that schools can hire whoever they want, but it doesn't feel like from the hiring side. The best people are highly sought after, and even if this tenured person is their top choice, they might be someone else's top choice as well. Even the very top places, but especially everyone else, is very concerned about whether candidates will really come.
Specifically with the question of hiring junior vs. senior people. There's a reason that schools hire the former far more often. Senior people are more expensive in a literal sense (generally, they get a pay bump from wherever they were before) and require more work on the part of the hiring department since they need to push through the tenure case on an expedited basis. Often even if a department wants to make such a hire, it will be forbidden by the higher administration (for example, we don't have permission to make such hires this year). There is also a cost along many dimensions to making job offers that aren't accepted, and senior candidates are less likely to accept (since quite often, their offer will be matched by their present institution, and most people would prefer not to move, all things being equal). There's also a psychological bias toward optimism about how a candidate will develop over the years. The senior person may have 15 papers, but they know that's all the papers she will write over that portion of her career (often the most creative); with you, they can instead imagine the great papers you will write at a comparable stage. And they know that you'll still need to get tenure, whereas a senior person will be permanent immediately without any chance to see how they will work out in the department.
As for what you can do during the interview: the cake is mostly baked on that score, but you can concentrate on giving a good and accessible talk. Practice it in front of a more experienced person and get their feedback. Also, do what you can to learn about the department and school and have intelligent questions. It's a minor thing, but giving the sense that you are taking the interview seriously, and are really thinking about what life will be like there will give a positive impression. It's also minor but I worry a little about your defeatist attitude showing, even if you don't intend it to. People can sense confidence or lack thereof, so going into the interview thinking you're the right person for the job can also make a difference around the edges.
