Apparently, his "folks" are outraged that Hillary Clinton's peeps are leaking and stoking State speculation. Hey, be grateful that they're doing it now, thereby providing you with a glimpse of what it will be like if you actually install her in the building.
My sense is that Obama believes it's better to remove his potential 2012 rival from the Senate and put her in his Cabinet. Well, in exchange for that, he shouldn't be fooled into thinking that she'll sit back quietly and take his direction. With Hillary as Secretary of State, Obama will have to choose either essentially to outsource his whole foreign policy to his one-time rival (and if so, what was the justification for not simply letting her win the primary election?) or this is just a small taste of the banquet of leaks the Clintons have in store for him.
And of course, don't even think about the PR hit that will result from his now "withdrawing" the job that the Clintonistas have led the country to believe is Hillary's for the asking.