I believe the Iraqis want to make a memorial there. There are a lot of Iraqis who were tortured and killed at that prison. To tear it down would be to abandon them and their memories, but to make it into a memorial and a museum of Saddam's regime would remind them of what was done there.
The Iraqis have been agitating to have Abu Ghraib torn down since before the war even began..
I think that they should still bulldoze the prison, and make a different memorial--perhaps make it a place of prayer and reflection. Just my $0.02, based on a spiritual warfare perspective.
Good point, let the free Iraqis decide what to do with it.