Well there are many factors that could have lead to his decision to sign a multi-year extension with Strikeforce, but when it comes down to it the motivation in most cases is money related. At this point, He will simply be getting paid more at Strikeforce being one of their top fighters, while at UFC he will be another fish in the pond.
But lets look at some other things. Diaz is a welterweight, his brother Nate just bumped up to WW in the UFC and is doing quite well and his training partner Jake Shields just signed to the UFC at welterweight. Shields is also next in line to fight GSP. I'm not saying Shields will beat GSP but I'm sure the posibilty of having his teammate as WW champ would help shy Nick away from going to the UFC at this time.
Which brings up another point, It's not up to Nick to sign with the UFC its up to Dana White. Dana has been a bit iffy when it comes to Nick, at time he says he doesn't want Diaz in the UFC, at other times he says that Nick has to "play the game". Ultimately, I think Dana wants to get him back in the UFC, he is a superb fighter who is arguably in top 10 WW and he has a style that you just gotta love; Punches in bunches on the feet and dangerous jitsu on the ground. And obviously, if you are an MMA fighter you wanna make it to the UFC. Nick is till verrrry young at age 26 and probably isn't even in his prime yet. We've already seen an effort at attitude change from Nick lately and I think he wants to take more time to prove himself too. As much as I wanna see Diaz in the UFC, I can see where Nick would want to wait a few more years (when this contract is up).
Which brings me to another point; Strikeforce. Strikeforce is undeniably the second biggest MMA promotion in the US now. However, its future is not guaranteed. Questionable matchmaking, championship holders that fight maybe once a year, and the dominance of the UFC can all aid in the downfall of Strikeforce. Remember Affliction? Elite XC? Strikeforce could be gone tomorrow. If Nick has the opportunity to get paid and have a possibilty of getting out of his contract early, why not take it. I'm not saying that Strikeforce is any real danger currently, but if its possible your ship may sink - Why not take a couple fights, take a couple wins, take a couple paychecks, all while growing your experience and record as a fighter, build your stock and face value?.....and if your ship does sink then off to the UFC you go
Leading to my final point; Say Strikeforce does fine. Over time they will just pick up more and more stragglers from the UFC. For example, they just added Paul Daley to their WW roster. If Nick can't go to the UFC to get competition, competition will surely come to him. I think Diaz wants to be in the UFC..... maybe for now Strikeforce is just the better option