I suppose he figures his legacy has enough image problems.
From Newsweek:
In a move that has keenly disappointed some of his strongest conservative allies, President Bush has decided not to pardon Vice President Dick Cheney’s former chief of staff, I. Lewis “Scooter” Libby, for his 2007 conviction in the CIA leak case, two White House officials said Monday.
On Bush’s last full day as president, Bush did commute the sentence of two former Border Patrol agents–Jose Compean and Ignacio Ramos–for shooting a Mexican drug dealer and then lying about it. But White House press spokesman Tony Fratto told NEWSWEEK “you should not expect any more” pardons and commutations from Bush before he leaves office Tuesday. Another senior official, who requested anonymity discussing sensitive matters, confirmed that no more pardons would be granted.
Bush’s decision leaves a long line of rejected pardon applicants, many of whom have retained politically well-connected Washington lawyers, to make their case for presidential mercy in Bush’s final days in the White House. Among them were junk-bond king Michael Milken, media mogul Conrad Black, former Illinois GOP governor George Ryan and former Louisiana Democratic governor Edwin Edwards. Bush also apparently turned down a last-minute plea from Alaska Sen. Lisa Murkowski to pardon her former GOP colleague Ted Stevens for his recent political corruption conviction.
Bush cares greatly about his legacy, and he has often said that history will record his actions to be correct, despite their unpopularity now, much like Truman is revered today while hugely unpopular when he left office (although not as unpopular as Bush now is). So I guess preemptively pardoning himself, Cheney or his underlings, or excusing the official misconduct of cronies might be too much for him to do, since he knows the reaction would not be kind.