the minute the controller was sure the cessna was going to maintain visual seperation and he notified united of this, the incident should have been over.
The controller was never sure of that, of course. He told him, and the Cessna agreed-- that's what the controller was sure of.
Like they said, the 777 was crossing Highway 101 at maybe a 45-degree angle. [Edit: more like 57 degrees.] The Cessna had already agreed to stay west of the highway, and at the last minute he agreed to pass behind (i.e. east of) the 777 climbing WNWward. The obvious suspicion is that it turned out to be impossible to comply with both instructions without coming too close.
What if the Cessna had responded "Unable" to the second instruction-- how would the tower have handled that? Maybe it was too late for the Cessna to make a right 360, so nothing to do but clear him to cross to the east side of the highway? Which it so happened he could have done-- no opposing traffic there?