AIG's story seems to be that they needed to retain the people who actually understood the derivatives they'd sold, so that they could successfully roll back their positions. Also, they claimed there was some risk that their counterparties would walk away and/or demand their money back if the people they'd been dealing with were no longer present.
In other words, the "I wrote such bad code you can never afford to get rid of me and fix it" defense.
Part of the problem is that most of the people who put together the CDS crap have long since left the company, whereas a lot of the people who still have jobs weren't even involved in that(i.e. secretaries, IT staff, etc...and even a few subgroups of financial people in AIG).
The other part of the problem is that getting rid of everyone in AIG now means that there would still be a giant portfolio that hasn't been unwound yet, and if it's just let go all at once it'll cause an even bigger explosion.