Good question. I can think of three answers:

Obama and his campaign asked Reid to make the attacks in order to get the smear out without having Obama’s/Team Obama’s own fingerprints on it

Obama didn’t initiate it, but he’s comfortable with the smear and desperate to get some traction on Romney

Obama’s afraid to tell Reid to stop, and risk angering his class-warfare base

The last one is a little difficult to believe, especially with prominent progressives in the media scolding Harry Reid for his baseless attacks and ridiculous, changing explanation of his source(s). Obama could use this as the nearly-proverbial “Sister Souljah” moment and recapture the high ground on Hope and Change by telling Reid publicly to either produce real evidence or stay out of the presidential race altogether. If Option 3 is really the truth, then Obama’s silence on this issue is a damning indictment of his leadership in political reform. And if it’s not, then Options 1 and 2 are even more damning of his leadership and promises of healing the partisan rancor in the nation.

Karl Rove tells Fox and Friends this morning that the President has to be assigned ultimate responsibility for Reid’s smear, especially given his silence on the issue:

Rove listed a website that anyone can visit to see the last 10 years of Mitt Romney’s financial records including how much he paid in taxes. Frustrated with the tactics of the Obama campaign, Rove said, “For the majority leader of the Senate of the United States to go out and say this is a sign of both the desperation of the Democrats and more important than that, the complete lack of character, the slime ball nature of the Senate majority leader. And Harry Reid ought to be disgusted and embarrassed and ashamed because he shamed the great institution that he claims to lead.” Rove said that President Obama is held responsible for the quality of his campaign even if he’s not the one verbalizing these accusations. He continued, “I not only don’t see the president disavowing it, I see his closest political adviser joining in this shameful activity. So the president hurts himself by this. What happened to all those promises of elevating politics … this is personal, this is shameful, this is despicable, this is Chicago-style thugs.”

That seems like the answer to the question, doesn’t it?