You are asking me something I can't know the answer to. But I will offer a couple non-legal expert opinions. Prosecutors are elected officials and they like to tout their "record of successful prosecutions". They often drop charges or don't even bring cases that they don't think they can win. A lot of times it isn't really about whether there was a crime or not, but about whether the prosecutors can win. And in this particular situation the case was handed off to another prosecutor. He may have just not wanted to try to clean up someone else's mess and start over with "theft" charges.
I also think cases like this with high media attention, tend to have a momentum thing. You start getting these side ruling go against you, because it was something that shouldn't have been a part of the case to begin, with and the momentum is going in the wrong direction. That is when deals are offered and made and or charges dropped, so the prosecutor doesn't get that "loss" on his record. Kane/Nestor and their attorneys (probably more the attorney's) were smart not to take that deal offered of lesser charges one the momentum began going south for prosecutors.
This would also be a hard case public opinion-wise. The victims are casinos. And a lot of people, especially gamblers don't have a lot of sympathy for casinos. I remember shortly after I moved to Vegas there was a rather brazen armed Robbery at one of the Strip Casinos cage. When I was out and about in the following days, naturally a topic of conversation and almost universally people were saying things like "good, serves them right". I mean this was armed robbery!. Little sympathy for the casinos.