Itīs inter-service politics. The army wants a smaller 2 engined aircraft with maintenance farmed out to the manufacturer. With the scale of the programme, the army would stay in charge even if the USAF bought some.
If the C-130 were purchased the USAF would perform the maintenance and, because of their other purchases, have the upper hand in the programme - and training, and logistics, and no doubt want to man a combined fleet for "economy of scale" etc.
Interestingly, the USAF originally said it was interested in the programme because its C-130s in Iraq and Afghanistan are operating at under a 50% load factor and it would be more economic to have and operate a smaller aircraft....
So, better, for the army, to kill the option off now......