This is surprisingly easy to understand.  We had a pretty good discussion about this at Alicublog yesterday and I summed it up this way:

...I think there is some really weird way in which the very people voting for these bills, and even those who support these bills, actually do imagine that the bills are largely harmless and even innocent of real malice. I think we never go broke underestimating the total inability of these people to add one and one and get to two, or to plumb the depths of their own malice, or to recognize that what differentiates collective action from private action is scale.
For example I think that people who support these discriminatory laws actually fail to think it through--just like anti abortionists who talk windily of abortion as murder routinely deny a willingness to actually lock women up as murderers and are even shocked that anyone interviewing them would take such a sharp tone about things. People really don't take any moral or intellectual responsibility for the logical implications of the acts they support or the legislation they write. My guess is that a large number of these people don't even think that their fellow bigots are actually planning to make life miserable for a fairly large subset of the community as in all gay people. When they imagine the impact of the law its like this:
Elderly wedding photographer can refuse flaming queer couple...
My grandma the pharmacist can refuse to poison a baby in the womb...
They totally don't imagine the havoc caused by wholesale refusal to provide services to an unknown and indeterminate number of people by everyone from the registrar of deeds to the parking attendant at the mall. They don't imagine the deaths potentially caused by some nurse refusing to give cpr to that "old gay guy" and they don't imagine that people like them, or cousin sal, or whoever might get "mistaken" for gay and not be served somewhere.
In short they lack honesty, probity, forethought, and the basic principle upon which democracy rests: that which is hateful to you, do not do to others/do unto others that which you would have them do unto you. Put yourself in the position of the person being legislated against as well as in the position of the imaginary top dog whose rights are being protected.

They are acting from what they perceive as a position of weakness, like a child that strikes out at a parent, breaks a lamp, and then wails "I didn't mean it!"  Or perhaps I mean a child who breaks the lamp to get the parent's attention and then realizes, after the fact, that negative attention is not what they really wanted at all.  This explains their surprise when people outside of the state, and people with whom their state does business, began protesting and proposing boycotts.  They operate from the perspective that gays are both everywhere and a mere fringe minority. They legislated against a hated, frightening, everywhere bogeyman and now they are shocked to discover that there are enough friends of dorothy out there, and concerned fellow citizens, to make little bits of local legislation seem highly problematic and uneconomical.

Aside from the obvious point that the legislators involved in voting for this bill didn't read or understand it I think its also the case that they see such legislation as permitting a small number of passionate voters (voters like themselves, their base voters) to experience a little temporary relief from an oppressive new majority moral code which makes them all feel sad, bad, and all minority-ish.  The law was an expressive act, a gesture, not meant to be taken factually or understood in any utilitarian way.

 For us the bill is a slippery slope--deny gay people access to one set of rights and you have, in effect, denied them food, water, and fire as the old Romans did to their exiles. Deny these rights to gay people and you deny them to all of us.  But to the legislators, who prefer to think in concrete, tiny, comparamentalized units, the bill merely prevents gay people from pushing their way into individual shops.  Not all the shops at the same time.  Merely prevents gay people from forcing granny to rent to them.  It doesn't potentially prevent them from renting from everyone.  You could hear them explaining this on the radio and in interviews. For example they kept stressing that if your pharmacist chose to begin shrieking "baby killer" and refusing to give you contraception that the large corporation would probably have someone else serve you, or direct you down the road to the next nearest babykilling corporation pharmacy which would no doubt be very near.  They saw, or pretended to see, this as merely legislating a compromise of rights, a carve out, quite small.  They are genuinely shocked to see a stable full of horses, gay people, and allies bolting for the door.  Its a bit rich coming from the party of slippery slope fame where any attempt to stem mass gun violence, even by a blind man, is prevented in the name of absolute second amendment rights.