Teago is correct - it was a political decision. El Prez's "Vision for Space Exploration" mandates that NASA use "Shuttle-Derived Launch Vehicles". Why Shuttle-derived? That was not explicity spelt out but the impression I get was that it was to protect jobs/investment in the industry. Mike Griffin has said before that options such as the Delta 4 Heavy could not be considered because they did not comply with the directions of the Administration. As a government agency, NASA is somewhat bound to do what it is told. Whether or not Shuttle-derived is the "right way" is a different question all together.
That is probably one of the biggest differences between Bush's vision and Kennedy's vision. Bush set the goal and the method, Kennedy set the goal and was smart enough to let the engineers decide how to acheive it.
No, this is completely incorrect.
The Vision for Space Exploration (VSE) set the goal, and left the method undefined. Although, by implication, the idea was for NASA to avoid operating a launch vehicle altogether, as that was the only way a new initiative could be afforded (see, the "sand chart").
And, indeed, under O'Keefe, NASA set about studying architectures using lightweight capsules launched on EELV's. NOT EELV-heavies, mind you; a 9-ton capsule launches just fine on a single-booster EELV light.
When Mike Griffin walked in as NASA administrator, he'd spent decades studying big moon missions on shuttle-derived hardware, and that's exactly what he set out to build. The new capsule grew instantly from 9 tons to 27 tons, which -- aw, darn the luck -- was just a little too big for an EELV, so a new launch vehicle had to be built. Man, what are the odds?
Exactly why Mike Griffin and therefore NASA decided to go this route is not known, and might never be known. But I highly doubt the Administration pushed him that way, when they'd pushed O'Keefe, hard, the opposite way earlier. Nor do I think that NASA-center Congresscritters are what drove him, though I'm sure they applied plenty of pressure. I think Griffin showed up with preconceived notions, and set about executing them.
But CEV of about 9 tons grew to Orion at 27 tons; that didn't happen by accident. It bould have happened only because being too big for an EELV was an unstated design requirement.
Read
http://www.astronautix.com/craft/cev.htm for a more detailed accounting of the sordid story.