I can't imagine why the bank would throw away 35% of the value and sell a house as a forclosure instead of helping a short sale go through. Has to be messed up incentives but I can't begin to guess how they are set up.
Whenever you're trying to figure out BoA, you have to keep in mind a few rules: they cheat, they steal from their customers, they lie to everyone including the government, and they do whatever gives them the most profit. You can assume their actions make perfect sense in light of those rules, if you knew the the accounting.
Unless they are in some weird tax situation where a dollar written off is worth more than a dollar earned (unlikely) the only motivation I can think of is spite or ineptitude (since the owners credit is ruined regardless and the bank makes less money).
There is perhaps some consideration to the fact that foreclosures are sold "as-is" for cash rather than financed with contingencies but that can't be worth the dollar amounts we are dealing with...
Actually, quite likely - $1 written off has a net "value" of $1 when written off, adjusted tax, etc., whereas $1 earned is actually $1 minus corporate tax rate.