Passing was not the wrong call. People love to assume "Beastmode" would have just walked in if given the ball. The fact is that he was pretty bad in short yardage situations that year, and had just been stopped by Hightower before that play.
I thought it was insane when it happened, but after looking at it and the timeout/down situations, I understand why they passed it.
Seattle had one timeout left. After the previous play, they let the clock go down all the way from 55 seconds to about 20. A failed run would force you to call your last timeout. 3rd down with about 15 seconds left and no timeouts means you almost certainly pass it on 3rd, since a failed run ends the game. You want to have as many chances at possible.
Lynch was no lock to score, he was not a short yardage specialist like a Marcus Allen. He was most dangerous when he got a head of steam and would truck defenders in the open field. He had a couple of goal line fumbles in prior postseason games and struggled in short yardage that season (although the sample size was small).
It made sense, it was just a disastrous result.
Hightower’s tackle on the previous play was huge. Lynch had a decent sized gap and some burst and gained 4 or 5 yards. Hightower needed to do a lot on that play. NE had two big defensive plays in a row.