So why not deny the allegations outright then and there, and squash the story?
Colletti decided not to file tampering charges. That does not necessarily mean that he doesn't think any tampering took place. According to the Chass article, even the owner thought some level of tampering took place. I would argue that Colletti probably decided not to file tampering charges for the following reasons:
1. It could strain relationships with other GMs in the majors and make it harder to do business.
2. It could backfire on him and some of his own rule-bending could come to light.
3. A sort of 'code of honor' among GMs, where all teams do underhanded things to gain a competitive edge, and there is an informal 'don't snitch' policy.
We saw something very similar to this in the NFL, where coaches like Herm Edwards and Tony Dungy had underhanded things happen to them at Patriots home games, but never filed charges, and didn't even make mention until years later. For them, it may have been more about reason number 3. But nevertheless, it doesn't mean nothing happened in those games.