The Clippers balked at the price tag the NBA was setting for Paul, which included giving up a number of draft picks, Eric Bledsoe, Chris Kaman, Eric Gordon, and Al-Farouq Aminu. It was too much for the Clips, who are trying to rebuild the franchise around Blake Griffin and make them a viable playoff team; losing all those players probably cancels out the merits of the Paul trade.
The league isn't quite yet willing to let this deal die though. They know the longer that Paul stays in New Orleans, the greater the embarrassment becomes for the NBA that they can't move a superstar on the team they own. It could threaten to undermine the entire 2011-12 season with the controversy it creates. Which is why they're not ready to quit on making a deal with the Clippers.
One has to wonder when the madness will end.