As I'm sure you remember, New Orleans (which is to say, the League Office) wanted more "young talent" in the revised three-way deal. The Rockets were also reportedly willing to "tweak" the second offer, but it's sort of clear now that the killer was the Rockets' and Lakers' unwillingness to add much more beyond that.
So what, exactly, did Hornets/NBA want besides Odom/Scola/Martin/Dragic? The Chronicle's Jonathon Feigen has the answer:
By the time the Lakers had ended their pursuit of Chris Paul, or at least put it on hold, it was likely not going anywhere for the Rockets, anyway. Late Saturday night the Rockets received the counter offer they had sought through the day, with the Hornets (as guided by NBA officials) greatly increasing their demands.
In addition to Rockets' top scorers Kevin Martin and Luis Scola, the Hornets wanted the Rockets to replace Goran Dragic in the deal with starting point guard Kyle Lowry, to add one of the team's top young prospects and to add a pick to the Knicks' first-round pick they had already offered, according to a person familiar with the talks.
That was a non-starter for the Rockets, but the deal died soon after, anyway. The time lost, however, also cost the Rockets several moves planned based on either landing Pau Gasol or knowing they could not. Most obvious was the hope to sign Nene using the added cap space from the deal and the promise to play with the seven-foot center.
I'm all for going "all in." I would not have minded at all if the Rockets had added much more beyond the original deal. Yes, it sucked that the Rockets were adding more basically so that the Lakers could get Chris Paul, but that didn't really matter. What mattered was that the Rockets were finally going to get the superstar (in playing ability, if not image) that they needed.
But there comes a point when the deal just requires too much. Lowry is one of the best starting point guards in the league, I think. No, he's not Paul (otherworldly, Vishnu-like), Rondo or Rose (really, really excellent, Arjuna-like), but he is, I think, good enough to start an all-star game if some peeps get injured. And adding him to the mix would have brought New Orleans' haul from the deal (which is, I remind you, only for a few months of Chris Paul -- not any sort of lengthy time) to an officially obscene level. Screw that. The Rockets would have fielded a real contender with an underrated "big three" of Pau/Nene/Lowry, but moving that to Pau/Nene/??? drops that significantly (seriously, who's the third-best player on the team then? Lee? Patterson? Hard to tell, I think).
Yet more evidence that the league was out to either punish Chris Paul or screw the Lakers (probably both). You might think that the league doesn't like Houston, but the same thing would have happened if the Lakers had partnered with anyone else, I suspect. This is just Lockout Part Dos, as far as I can tell: make sure the players don't get uppity, and maintain the illusion of parity.
Fuck Stern; Swine Cabal; etc. etc. etc.