I thought it was fairly shrewd - any kind of "extra-legal" action against him in Hong Kong would almost certainly piss China off, and they're really the only tiger that the US isn't in a hurry to get into a wrestling match with.

A hit on Snowden in Hong Kong would be an immense international diplomatic incident. A hit on him in Iceland would be a flash in the pan (what's Iceland going to do about it?). My hunch is that he's banking on diplomatic tensions between China and the US to shield him.

Hong Kong puts him under China's diplomatic shield without necessarily directly exposing him to the PRC's equivalent of the NSA, who I'm sure are eager to get their hands on him.