If he resigns then the confirmation hearings for his replacement will open up a truck load of dirty laundry that the President does not want aired. No wonder the President pronounced his confidence in Gonzales after the "baby seal clubbing" he took a couple of weeks ago.
Here is the story
From the LA Times opinion page.
That leaves Senate confirmation hearings of a new attorney general nominee as the main leverage for Congress to secure an independent criminal investigation of the U.S. attorney firings.Moreover, the Senate might use such hearings to do more than secure testimony from White House aides about the firings, as Leahy indicated. It also might use the opportunity to probe the Justice Department's role in mistreatment of detainees, four years of flouting the Foreign Intelligence Surveillance Act and other serious matters.
Rather than face such scrutiny, the White House may prefer keeping a drastically weakened Gonzales in place. But doing so exacts a high price for the Justice Department and the nation. It damages department morale and credibility, undermines its ability to recruit and could affect perceptions of federal prosecutors, jeopardizing important cases. By retaining Gonzales to preempt Senate action, the president has signaled that this is a price he is willing to make the nation pay.