Let's be frank. You don't pull out of a debate when you're behind in the polls and your opponent is gaining momentum every day. Unless, you're hoping for a circuit-breaker.
The Palin effect has washed through the polls and now they're starting to reflect a new campaign on the economy and that favours Obama because he's way ahead of McCain on the economy with voters. The McCain camp has come under intense criticisms for its lies and its reluctance to face media questioning.
The first debate was due to be on foreign policy and that's McCain's strength so he could have hoped for a bounce if he bested Obama in the debate. That would have been dampened by the current focus on the economic crisis, including Bush's address to the nation later today.
Plus there's another bind for McCain. Bush needs his support to get the bail-out package through but McCain can't be seen to be in lockstep with the incredibly unpopular Bush. McCain can't win this election if he looks like a mainstream maverick, that's why he has been reluctant to sign up to a package that is drawing a lot of criticism in mainstream and among all those people who have lost their homes and jobs (why bailout CEOs with million-dollar packages - that's suicidal for McCain).
McCain hopes that his campaign suspension will get him free of these horrible knots in one bound but it is just as likely to focus yet more attention on his deep links with the failed policies of Bushite republicans.