I suspect that their rationale is exactly what the quote says. The federales have already given themselves the right to do whateverthehell they want to American citizens, whenever and however they want. There's no need to try and move that authority over to the military, as people would balk about it (which they should have done 10 years ago). It would just be a huge layer of complication in a situation that already favors them greatly.
I'm surprised that the Republicans don't get that, as they're the ones who should be so happy about the decimation of habeas corpus. I suspect that they're just trying to put forth a "strong on terror" front, and involving the military, useful or otherwise, is a good way to go about it.