They really can’t just blow it up. The junk left in space would take out every other satellite that came along.
They could have done it as it was coming down. They did not want to spend the money on it. Life is cheap.
http://www.youtube.com/watch?v=Jj-bC5KQ8os
USS Lake Erie blew up an out of control satellite in 2008. They could have blown up this satellite, too.