It didn't. Read the Abelson report (which has been discussed ad nauseam in past HN threads). MIT did not want Swartz prosecuted, and told the prosecutor that. The prosecutor chose to go after Swartz anyway. MIT's error was that they didn't push back harder on the prosecutor (for example, by making a clearer public statement along the lines of the one JSTOR made, that since the stolen data was returned, no further action was necessary or desired).
> Clearly the MIT administration wanted to make an example of Swartz
No, it didn't. It just made an error of judgment (described above). It had nothing against Swartz and was not trying to make an example of him. The Federal prosecutor was the one trying to do that.