The concerns were that there are a few members of certain Irish cultural organisations happily living in the US and it would wreck the peace process to extradite them, while NOT extraditing them would raise objections from the other side.
And, it's rather easier to bring a private prosecution for say war crimes in the UK - and the government didn't want the embarrassment of having to arrest various senior US politicians. This happened recently with an attempt by a human rights group to prosecute an Israeli gerneral over the west bank 'invasion'. The government couldn't stop the warrant being issued but got round it by the politican not leaving the plane when it landed in London and the police claiming that an El Al plane was Israeli soil and they didn't have jurisdiction.
If this were the case, wouldn't it be better not to have the treaty in the first place? Then no questions are asked at all.
And what was wrong with the old treaty, apart from the inconvenience of having to produce enough evidence to satisfy a British judge?
The UK has a huge amount of investment in the US, if the US were to treat the UK like it did France after they refused to join the 'coalition of the willing' it would do a lot more harm to the UK economy than boycotting Perrier did to France's
It annoys a lot of people that the US can extradite someone from the UK without providing any evidence, yet the US never got around to ratifying it so the UK can extradite someone from the US without providing any evidence.
Of course, it may just be that the UK government is a bunch of idiots who think it's a good idea to give foreign legal systems this much power over their citizens, and the US has more sense.