The reasons for this settlement are to simply get it over with.  The easy politically neutral strategy would have been to prolong this, go to court, spend millions in legal fees, then lose in the end.  But at least that would have taken it past the next election cycle.

This was a no-win situation for Trudeau and he chose a politically damaging but arguably the least expensive route to take.  The actual damage was done by the Chretien and Harper govts when they chose the populist, politically safe strategy of bending to the will of the popular opinion even though it violated our own laws.  In other words, they did what was "popular", not what was right or even legal and very far from being courageous or principled.      

Stripped down to simple facts:  Khadr is Canadian, like it or not.  And his rights as a Canadian were violated.   So it doesn't matter whether you hate the guy - or what popular opinion about Khadr says.  Our Govt did the right thing, even if it's wrong politically.