Besides its impulse not to validate critics, the administration held on to Gonzales for fear of the difficulty of getting a replacement confirmed. Congressional Democrats reacted to his departure as if it were part of a cover-up of whatever vague crime they believe was committed at the Department of Justice. They will seek to exert the maximum possible concessions from the White House for the release of documents related to the firings and the NSA program in return for confirming a new attorney general.
The administration should do what it should have done all along -- nominate the most capable lawyer it can find and trust that the strength of its case will eventually win out, both on the merits of the controversies left over from Gonzales and the document fights. Hiring and firing U.S. attorneys is a core executive function over which Congress has no say and limited legitimate oversight function. As for the NSA program, Congress has validated the heart of it in a temporary law passed this past month, and the administration is on strong political grounds defending it.
Perhaps Congress won't relent, but if the nominee is obviously qualified and can joust effectively with his tormentors, perhaps the mob will be embarrassed for once instead of the administration. In any case, there could be worse things than keeping Solicitor General Paul Clement in the top job; he is slated to become acting attorney general and is widely considered one of the smartest people in government.
The Gonzales case is sad all around: for what happened to the reputation of a decent man over-matched by his responsibilities; for the distraction at a crucial department of government; and for the blood-lust that masquerades as political opposition in Washington. But it's never very edifying when the mob wins.