You mean because it was plainly unconstitutional (a violation of the Commerce Clause)?It probably came down to realizing how much Arizonians would have to pay to fight massive legal battles against the endless wallet that Apple has.
However, I doubt that any legislators made a decision on that basis. They routinely pass laws that know will not stand up in court, because it wins them points with their constituents and do not really care about the consequences to the state. I am sure they decided against this once they heard from people on the other side, they realized they were being used in a fight between giant companies and decided not to get in the middle.It didn't make sense when they realized they were in over their heads.