According to everything I've read, the reason the deal was pulled was because the Warriors were under the impression that Fresenko was ready to start playing. After they brought him in, they realized that he was still at least two weeks away from being able to contribute at all.
In a shortened season like this, two weeks (plus time to get acclimated to the other players) is a long time, especially since they were going to give that guy a million bucks.