Kane has said the case was flawed on a number of levels and was moribund when she took office last year. She also pointed out that 10 of the 11 public corruption cases brought by her office have involved Democrats.
The long-term risk to Kane is damage to her reputation as a reformer, analysts said.
"It's a strange case that doesn't mesh with her image," said Christopher Borick, a political scientist and pollster at Muhlenberg College in Allentown. "Isn't she supposed to be different, and go after the culture and longtime ways of doing business in politics? This is an awkward situation for her, to say the least."
The decision looks like an "assist" to Democrats, Borick said. Philadelphia is the linchpin for the party's statewide victories, and good relations with the city would, theoretically, help Kane later.
On the other hand, Kane has never been close to the Democratic establishment. Party leaders did not even want her to run for attorney general in 2012. Then-U.S. Rep. Patrick Murphy was the chosen one in the primary.
In 2012, she earned more votes than President Obama in Pennsylvania, becoming the first Democrat and the first woman to be elected to the state's top law enforcement post.
Kane swept in on a promise to bring change to Harrisburg, and she repeatedly questioned whether Gov. Corbett, a former attorney general, played politics with the Jerry Sandusky child sexual-abuse investigation. She has launched a review of that probe, which is pending.
From the start of her political career, Kane has been labeled a rising star of the party, mentioned as a potential candidate for governor or U.S. Senate. Some Democrats encouraged Kane to run this year for the nomination to take on Corbett.
Most Democratic strategists interviewed said that Kane had a strong second-day response to the furor over the dropped investigation, including a Monday news conference in which she detailed the weaknesses of the case.
But they were more critical of her initial response when The Inquirer disclosed the canceled investigation. In that early statement, Kane labeled criticism of her decision-making "nothing more than the Good Ole' Boys club playing political games to discredit me." She also said racism tainted the investigation, saying African American officials had been targeted.
"She undercut the credibility in her argument and made it political" by using those terms, said Larry Ceisler, a Democratic communications consultant in Philadelphia. Ceisler doubts Kane would suffer in a future Democratic primary, but might with a broader electorate.
"She has picked up her first significant piece of baggage," he said.
Charlie Gerow, a Harrisburg-based Republican strategist whose firm is advising Corbett, said it was too early to "war game" how Kane's decision might play out.
"At this point, there are still more questions than answers," Gerow said. "I don't think this story is over."
Among those questions: Kane would not name the federal authorities who agreed with her that the case was unwinnable, and the FBI said it had never made that determination. Neither has the attorney general disclosed what led her to say that the sting operation had been tainted by racism.
Gerow said he thought that Kane's news conference was "perfunctory" and that she seemed defensive and even angry.
So far in office, Kane has taken bold stands that have played well politically.
She stopped Corbett's plan to privatize the state lottery, for instance, with a legal opinion that such a plan required legislative authorization. She also declared last year that she could not in good conscience defend the state's law prohibiting marriage between people of the same sex against a legal challenge. She stage-managed that announcement before a cheering crowd at the National Constitution Center.
Kane also filed criminal charges against XTO, the natural gas arm of ExxonMobil, for a wastewater spill in Lycoming County, going far beyond the fines federal authorities imposed. That sent shudders through the Marcellus Shale gas industry but cheered environmental activists, a Democratic constituency.
Corbett declined Sunday to comment on Kane's decision to shut down the probe, saying he would "let the reporting speak for itself."