It's moreso the local affiliates who are disappointed about it and forcing NBC's hand in this case. It would be easier for NBC to keep Jay Leno on weeknights @ 10pm this year, and start to phase him out next year.
NBC apparently has roughly 19 new shows in development for next year's schedule at this point, but I don't think any would be ready to debut after the Olympics. So if they move Jay Leno back to 11:30pm, they would need to find shows to fill those 5 hours of primetime a week that would be freed up. I'm not sure reruns of old NBC shows or old movies could fill the void and produce comparable or better ratings numbers to help bolster the lead-in to the local affiliates' newscasts. As well, if Jay Leno moves back to 11:30pm, what happens to Jimmy Fallon's and Carson Daly's shows? I think it creates more problems than it solves at this point in time.
Also, no disrespect Hugh, but I don't think there is a cause and effect between the disappointing ratings of The Jay Leno Show and The Tonight Show with Conan O'Brien, respectively. Conan O'Brien was already struggling in his timeslot against David Letterman in June, well before Jay Leno's show even debuted.
Ultimately, NBC was caught between a rock and a hard place in 2004. They were afraid that Conan O'Brien would walk away from their network when his contract expired, so offering him the Tonight Show was a way to keep him in the fold. The only problem was that Jay Leno ended up still being the #1 leader in late-night when it came time for the transition in 2009, and consequently, NBC didn't want to lose him to another network -- which is how the Jay Leno Show came to be.
Six months after the transition, it's clear that both are struggling in their respective timeslots. However it would be pretty costly to terminate their relationship with either host, as both have a large poison pill clause built-in to their contract. In the end, NBC is in no better a position now in 2010 than they were in 2004.