Bayh's Withdrawal: A Conjecture
One interesting possibility occurs to me. Perhaps he believed that an earlier announcement would result in a bruising primary fight and the probable winner would be a candidate unlikely to win the election—roughly speaking, what happened to the Republicans not long ago in a New York congressional district. Resigning only a few days before the deadline for the primary throws the choice to the state democratic committee—which can, and perhaps will, pick the strongest candidate.
I should add that I know very little about Indiana state politics, so this is only a conjecture. Perhaps some better informed reader can tell me if it is a plausible one.