Because they're a bunch of idiots is my best guess. Federal government too, of course. The reasons for the federal government's refusal is in the article you posted: "But the water does contain some oil residue, and that is too much according to US environment regulations."
Seems nonsensical to me, but hey, bureaucracies and common sense are like water and oil- they just don't mix. (ba dum dum *cymbal crash*)
I didn't really press him and I'm not too sure he knows a lot of details about it. I'll ask him more about it the next time I see him. I did a bit of googling and found this article which may answer some of your questions. Apparently, the Saudi government managed to keep the whole thing a secret, so not a lot is known.
Could Cleanup Fix for Gulf Oil Spill Lie in Secret Saudi Disaster?