What you are describing is the state siding with the supporters. They're doing the nominal minimum to enforce the law and they know that's not enough. If the state wanted to side with the TMT people then the protestors would be arrested whether there's facilities for them or not. You're right it won't be built in Hawaii. The state has sided with the opposition.
Group X wants something done. Group Y doesn't want it done. There is a political street-level fight. Group X continues to support you as long as you say the right thing. Group Y not only supports you, it draws in major national and international news coverage. As the fight drags on, then, you get more and more support.
So why should it be any other way than the way it is? From a political marketing standpoint, this is a buzz generator. If you play your cards right, you can actually appear to be on both sides of this issue at the same time. The longer it drags on the more support you get, the more you energize the base.
I don't see this resolving any time soon, and I completely agree that it's unconscionable what's going on here. But whatever is going on, it's going on for logical reasons for those allowing it to be this way. There may be corruption in the way decisions are made, but there's no incompetence here that I can see.
It makes perfect sense if you think looking incompetent is better than looking like you're supporting something that will lose you votes.