I can think of a hundred reasons, but here's a good one: If word got out that Osama was dead, the dumbocrats would say the war on terror job was done, and we should stop this costly and meaningless war.
Within three years we'd all be speaking Farsi.
Here's another: It's probably true that many of his own followers don't know his fate. The more the CIA gins up and sends out fake messages, the more traffic they foster among his followers and the better chance we have of catching them. Also, we don't have to guess what the heirarchy is as long as some think he may return (would you as a lowly follower want to usurp him?)
Osama's very alive until he's better dead, then he will be much better dead. Which may be never.
Trust me on this.
By the way, I believe Iran would be a more formidable enemy than Iraq or any of the other middle eastern countries.
"Within three years we'd all be speaking Farsi".