NASA knew they had a problem with the material coming off the external fuel tank. They should have grounded the shuttles like some people were calling for after STS-112 which was flight when material from the external fuel tank dented the SRB.
Supposedly, the crew could see the damage to the leading edge of the left wing. One of the crew emailed his wife about the damage. Rumor is that after the accident she brought this up to the suits at NASA and they sent a "group" out to see if indeed it was possible to see the damage by "eyeballing" using one of the mockup/trainers. The "group" supposedly concluded it was not possible to see the damage. The people that assisted the "group" with this, it is rumored, were agitated at this news since they did not agree and felt that it was obvious the crew could see the damage. From the flight deck and maybe from another spot.
NASA knew material was coming off the external tank and hitting parts of the system and they let the shuttle fly. Bummer....