At the end of TAA, it was revealed that Count Olaf had made the Baudelaires run laps every night to get them tired enough to flunk their classes so that Nero would expel them and allow Count Olaf to adopt them. He personally witnessed Nero telling the Baudelaires that were expelled, yet he decided not to adopt them and instead went for the Quagmires. Why did he give up after succeeding?
Because he was immediately exposed (or imminently to be exposed) as Count Olaf in front of Mr. Poe, surely? Conceivably he was already planning to give the job up as a bust, since he was in the process of having the Quagmires kidnapped at that very moment.