Maybe the data from the online courses came in during the meantime and Stanford realised that they could grow the university exponentially without opening new campuses?
Why not Columbia, indeed? As pointed out elsewhere in this thread, let's not forget where the Manhattan Project - an project that spanned multiple countries - got its name!
Columbia's always been a top-tier research institution - in fact, it has more Nobel laureates than any other university in the world. As far as computer science is concerned, let's not forget that a number of great achievements in tech & computer science (past and present) are the work of people who are or were in some way affiliated with Columbia. I can't find a comprehensive list at the moment - unfortunately the Columbia CS department website doesn't brag about itself enough for that - but it's not too hard to think of examples.
Columbia already has an engineering school (the Fu Foundation School of Engineering and Applied Sciences). The school is known for the strength of its graduate and undergraduate programs - its selectivity rate for undergraduate admissions, for what it's worth, is lower than any other school in the country except MIT.
Is there room for improvement? Absolutely - I can think of a number of ways. But the tech scene in New York is young and looking to grow quickly. It makes more sense to me to take advantage of the tremendous resources already here and amp them up, rather than start from scratch.
Unfortunately, for reasons that are more political than they are logical, I'd be surprised if Columbia actually won this contest. But it would be a pleasant surprise, knowing that they made the right decision.