Red State:

"...the most important reason is that "money talks." How many alumni of Jewish descent threatened to pull the plug on the institution? How many veterans who saw their band of brothers killed at the hands of Iranian terrorists protested? How many supporters of the university who experienced little pain directly from the Iranian monster, but had abundant enough common sense to not tolerate such a choice by the university?"

One word describes why: Money

Bollinger knew he and the school were going to lose a lot of it, and that's why he beat up on the Iranian despot.