In part because losing the case would be worse for the future. Ars Technica had a good writeup on the judge's frustrations. <a href="http://arstechnica.com/tech-policy/news/2010/12/judge-in-xbox-modding-trial-berates-prosecution-halts-trial.ars" rel="nofollow">http://arstechnica.com/tech-policy/news/2010/12/judge-in-xbo...</a>
Standard police / prosecutor procedure: a witness up and "remembers" a damning detail immediately before trial. This isn't disclosed to the defense. The fact that the prosecutor felt comfortable acting this way even after the previous shitshow he put on is simply amazing, and I think goes to how far they're willing to break the law.