The loyal Bushies are shocked, especially over the non-pardon of Scooter Libby. Atrios says Bush protected himself better by not issuing pardons:

Pardoning the people below him would remove any 5th amendment reasons to not testify

Marcy Wheeler says looking out for #1 is who Bush is:

it sure appears that Bush stayed true to himself: putting his own welfare above that of those who have protected him for so long.

If I were looking for an explanation for non-pardons in Bush's character, I would cite his contempt for others, which borders on sadism. Bush was proud to sign more death warrants than any other Governor. Remember his refusal to commute the death sentence of Karla Faye Tucker, as recounted by rightwinger Tucker Carlson? 

In the weeks before the execution, Bush says, "A number of protesters came to Austin to demand clemency for Karla Faye Tucker." "Did you meet with any of them?" I ask. Bush whips around and stares at me. "No, I didn't meet with any of them", he snaps, as though I've just asked the dumbest, most offensive question ever posed. "I didn't meet with Larry King either when he came down for it. I watched his interview with Tucker, though. He asked her real difficult questions like, 'What would you say to Governor Bush?'" "What was her answer?" I wonder. "'Please,'" Bush whimpers, his lips pursed in mock desperation, "'don't kill me.'" I must have looked shocked — ridiculing the pleas of a condemned prisoner who has since been executed seems odd and cruel — because he immediately stops smirking.

Of course it's possible Bush pardoned everyone secretly, according to a well-known former White House counsel - something we wouldn't know until they were prosecuted and revealed their secret pardon.

Update 1: The Murdoch Standard says Cheney complained bitterly about Bush's refusal to pardon Scooter Libby. That just about rules out any possibility of secret pardons, except if Cheney is lying. Of course Cheney normally lies, but this story trashes Bush to his conservative base so it's unlikely to be a lie.

So why didn't Bush pardon Libby and the rest of his administration? First, he thought Libby was actually guilty of perjury. Second, he finally got sick and tired of catering to the corrupt rich, according to Nancy Pelosi's answer to Larry King:

I spoke to him about that yesterday at breakfast before we came to the Capitol and he was very proud of that. He said people who have gotten pardons are usually people who have influence or know friends in high places--is not available to ordinary people. So he was very proud of that. It was interesting. He thought that there was more access for some than others and he was not going to do any.

Of course Bush spent his entire life enjoying the advantages of having family and "friends in high places." That's how he got into the best schools, how he avoided combat in Vietnam by jumping over thousands for a coveted spot in the Texas Air National Guard, how he avoided prosecution for deserting with two years left to serve, and how he avoided prosecution for drunk driving. (The most important biography of Bush was appropriately called "Fortunate Son" by J.H. Hatfield, who was driven to suicide by Karl Rove for revealing Bush's cocaine arrest.)

So it's an irony of Biblical proportions that Bush's last official act was to stiff those exactly like him - corrupt criminals "with friends in high places."

Update 2: But why didn't Bush pardon himself? Maybe he's stupid enough to believe the Yoo/Bybee memos protect him.

Or maybe he has a real defense - that Dick Cheney made all the illegal decisions and kept him in the dark. Would Bush actually throw Cheney under a prosecutorial bus? If so, it would be the Greatest Story Every Told.

Or maybe he shares the deep psychological need of some criminals to be caught and punished. If so, where is the new David Frost to reveal Bush's tortured psyche?

Update 3: John Dean thinks Bush didn't pardon Libby because he was finally sick of Cheney:

"I suspect he's decided that he'll leave his former vice president to take care of the future care and feeding of Mr. Libby," Dean replied. "By the end of the administration, Cheney had lost his clout with this president. ... Bush may have just said, 'I've had enough of the backfiring Cheney schemes' and decided to take no action."

Who knows - maybe Bush would throw Cheney under the bus!