I wonder if this is a generational thing. The baby boomer generation handing out gongs to its own. Just as in the political world where the generation that benefited from universal health care, free university education, and could look forward to a comfortable retirement, only to begin removing these from future generations; that inherited a post-Cold War world and declared a War on the Muslims. This generation that was going to change the world but fucked up, have seen the literary figures they built up - Rushdie, McEwan, Barnes, Martin Amis etc revealed as tedious and pretentious as younger writers sweep past.
It therefore seems natural that Blair in his final days in power should attempt to redress this balance by giving Rushdie a gong, as if to say "look what we have achieved". It is also appropriate that it should be Rushdie he chooses, since this man is a shameless self-publicist. I took against him in the nineties when a read a book review he'd written, in which he described the prose as being as "subtle as a fatwah". Just in case we needed reminding of the reviewer's credentials.