It may be wishful/biased thinking on my part, Phil, but I took this in context of decision not to appeal the 9th Circuit's ruling against DADT and the current makeup of the Supreme Court to be a desire to avoid having this decision decided by the current panel of 9; guessing somebody thinks Kennedy would swing right if there is a vote on this one and not wanting that to happen, the administration argued against the case going forward.
Further complicating the picture, I'm guessing, is a desire to have this matter handled through the executive and legislative branches rather than the judicial so that the final outcome cannot be attacked as "judicial activism" and used as fodder for the 2010 and 2012 cannons.
