In my opinion, power politics. That's not to say that there aren't important matters involved, too.
Environmentalists--of whom I suppose I am one--don't want Keystone because we feel that making a big investment in a very dirty energy source is not the right way to go. Feelings about that are very strong indeed--you may remember that there were environmentalists picketing in front of the White House; NASA scientist Dr. James Hansen, who is one of the leading authorities on climate change, was arrested in one of the protests.
Environmentalists, you may have noticed, are more aligned with the President than with the Republicans. (I think it's fair to say that environmentalists are not very welcome any more in many GOP circles--especially the 'Tea-partyish' ones.)
On the other hand, many unionists are largely in favor of Keystone because construction could create a lot of jobs for their membership.
Unionists, you may have noticed, are also more aligned with the President than with Republicans. (In fact, I think it's fair to say that most GOP members never met a union they liked--see Gov. Scott Walker of Wisconsin for exhibit "A.")
Keystone, therefore, put the President in the uncomfortable position of having to alienate one or another of two important groups of supporters--in an election year, no less. When he deferred the decision, he dodged that particular bullet.
The Republican attempts to deflect that bullet back at him (so to speak) are ingenious. (To be fair, most of them ideologically favor Keystone anyway, so if they can force it through, they will also think that that is a good thing.)
So, IMO, it's mostly power politics. But I hope that Keystone doesn't get built; I truly believe it is not the kind of energy investment that we should be making. Transforming our economy to a sustainable basis is a big job, and we are overdue in getting serious about it. Keystone would be a big step backward.