First, your question assumes it was White House initiated. I've seen some suggestions it was Rummy's idea, that he had no inclination to spend the next two years wasting his time in front of House and Senate committees trying to burn the Administration and him in particular. I don't blame him; he would be bound to have a frustrating and unproductive final two years.

So, maybe Bush would have kept him on.

Alternative explation is that the WHite House really was as in denial as they sounded about their prospects, and didn't see any drastic action as being necessary. Which would be fully consistent with the Administration's usual pattern.