The NY Times has a few more interesting details:

"The president believes everybody ought to be treated with dignity and respect, but he does not believe we should be politicizing people's sexual orientation," said Scott McClellan, a White House spokesman.

...

Mr. Ashcroft, socially conservative and deeply religious, was known for his strong views against homosexuality during his days in the Senate. He said then that he considered homosexuality a sin, and he opposed legislation to protect gays.

But in his confirmation hearings in 2001, he pledged not to tolerate discrimination against gays in the Justice Department. Critics said today that the decision to bar the gay pride event amounted to his backpedaling.

Senator Russell D. Feingold, Democrat of Wisconsin, said in a statement today that he had asked Mr. Ashcroft before confirmation about DOJ Pride's use of government facilities. Mr. Ashcroft said then that he had "no intent to treat this group differently than any other."

Regarding Bush's "not politicizing sexual orientation", I refer you to my earlier post on queers and the GOP.

On a similar point, I'm always annoyed by people who think a gay man in the office who puts a photo of his lover on his desk is "flaunting his sexual orientation." I was reminded of it when I saw this photo of Blanche Lincoln, a Senator from Arkansas, in the Times:

Doug Mills/ The New York Times
Senator Blanche Lincoln has a photograph of her twin sons, Reece and Bennet, 7, on her desk, facing visitors.

The original photo in the print edition showed about 5 such photos of her husband and children in a row at the front of her desk.