So if you picked "keep" you have a chance at an extra $125,000. But you also look like a selfish bastard on national TV, you'll probably lose a lot of friends, and whatever relationship you had going with your housemate (I assume there was something, I didn't watch the show) is now gone. I think those outweigh the extra hundred-odd grand.

The moral of the story is that ongoing relationships can break the prisoner's dilemma. This could be anything from an emotional relationship to a business contract to mere public scrutiny. The prisoner's dilemma is really only a dilemma if it is a true one-shot game, or if the monetary amounts are enough to overcome these other factors.