The hit on Ace was authorized....and it was Nicky's last chance.
The bosses back east clip Andy Stone, just to be safe. Nicky suggests they wouldn't have bothered if Andy had been italian. So the bosses deal with him, but they let jewish bookie Sam "Ace" Rothstein live? No way. They went to Nicky and said, "Take out the jew and all is forgiven." He tries a car bomb, but thanks to a balance problem and a metal plate, Ace lives. And the mob don't like it when you blow a hit. Thus, Nicky and his brother get a Texas Funeral
. And that's that.
- Although this doesn't explain why they apparently just abandoned the hit on Ace; being the mob, if they really wanted someone dead they're not going to just throw their hands and give up after the target has a lucky escape, they'll keep trying until they're successful. And as Ace himself acknowledges, the person they're targeting in this case is someone who can still make them a lot of money, unlike Andy Stone who has outlived his usefulness, thus making it illogical to order the hit in the first place.