The flip side of the why-don't-people-resign-on-principle-anymore question is: why-don't-the-people-who-obviously-should-resign-resign?
Alberto Gonzales and Paul Wolfowitz have, each in his own way, proven themselves incapable of doing their jobs anymore. Gonzales is unable to distinguish his role as Attorney General from his role as a fixer for the president, incapable of getting his stories straight or of providing even a bare minimum of coherence in his public statements. The result has been growing disaster for the Justice Department.
Wolfowitz is obviously a smarter man than Gonzales. Going in, he had some good ideas for the World Bank. But he never gained the trust of the bank's professionals, and seemed not to care much about it. Being ethically compromised while crusading against corruption is untenable for the top man. The result is growing disaster for the World Bank.
Yet they cling to their jobs, unwilling or unable to just hang it up, by turns apologetic and combative. Everybody knows it's just going to end at some point -- and the longer it goes on, the more embarrassing it becomes. That's the immutable law of the political scandal. Why not just get it over with? The answer, I think, lies in the macho culture of the Bush administration, the president's peculiar psychology: Confronting your political enemies - never giving them an ounce of satisfaction, never acknowledging they might have a legitimate point - is more important than the actual business of governing, getting things done, etc. (In the case of Gonzales, there is an additional advantage of leaving a handy punching bag in place at Justice so that attention does not shift to where it ought to be - the White House.)
The obvious political self-destructiveness of always, always digging in your heels, never cutting your losses - call it governing-by-pique, or the six-year-old's guide to personnel management - seems not to matter to Bush, Gonzales or Wolfowitz. That's not only a gift to the president's political enemies, it's doing terrible damage to the institutions involved and the work they do.