I'm not sure she could do anything else. However bad the limits on free speech are, applying the law selectively is probably worse.
There is also another general insult law which applies to everyone and where no government approval is needed. This case would run anyway.
EDIT: does german law allow for pardons?
No idea. But in this case it's the government itself that gave the ok for prosecution in the first place (it's a very special law...). It doesn't make sense to first say "go ahead, law enforcement" and then pardon Böhmermann.