They probably mean detrimental to the governments good. They wouldn't want to say no to US requests but they would been seen as the bad guys while the extradition (and/or asylum) proceedings dragged on for months.

They are also trying to pass legislation (Communications Data Bill) http://www.bbc.co.uk/news/uk-politics-22891845 to allow[1] communications logging of metadata. Having him in the country would make it even more newsworthy as there would be a human interest angle.

[1] Whether they are doing it now without legal standing is an interesting question. My guess is yes and the former Labour home secretaries are aware and complicit and would really like it legitimised.

Possibly because his example encourages citizens to take a stand and act against those who like to work in the shadows.