Because the Federation was fully in war-mode at that time, and the stated reason would be that it would give the Dominion an advantage. I think the Allies were still incredibly wary of the Founders (How do we know all the Changelings are infected? What if it's a ruse?), especially considering that they have infiltrated deep into the various Alpha and Beta Quadrant powers.
It was a bit of "Give us a reason to give you the cure".