Based on Edwards speech last night and the way he introduced Kerry today I get the impression that Edwards impulse was to fight it out tooth and nail in court. (He is, after all, an attorney.) If Edwards ever wants to be President it would be a big step backwards to get painted as a bad loser.
Truthfully, I don't think Kerry had anything to lose, personally, from fighting it out. Having lost an election, it's very unlikely that he'd be nominated again. But he could do serious harm to Edwards, the party and, lest we forget, the country.
By stepping aside, Kerry has preserved Edwards chances in the future.