This actually seems pretty obvious to me - the reason the Jazz are such a strong organization is that they run it under a goal-oriented business model. Note how often the GM, coaching staff, and even players reference the goals that they have throughout each season.
For the past two years, the goals that management and Corbin agreed on were to make the playoffs. They knew they didn't have a championship-caliber team, but set their goal as the playoffs anyway.
Corbin's first full year they got to the playoffs, the goal is met, and he's offered an extension.
The next year, same goal - get to the playoffs. The goal isn't met, so Corbin isn't offered an extension.
They're very clear on the goals this year as well - build a strong defensive team while developing the young players. My guess is they probably have metrics associated with this that they're not commenting on in public, but I'm sure Corbin has targets that he's shooting for - opposing team field goal percent, opposing team points per possession, opposing team total points allowed, etc. As well as growth metrics for each of the young players.
If Corbin hits the targets, he'll be extended past this year. If he doesn't, he'll be let go, because that would be two years in a row of not meeting goals.
That's a really smart way to run an organization.
(And as a side note, it does help to explain some of Corbin's decisions over the past few years. If you're given a goal: make it to the playoffs - you'd put your best players on the court for the lion's share of the minutes, and not worry too much about young player development because - even if JazzFanz doesn't agree with it - it isn't the primary goal. I'm actually hopeful about what he'll do this year, because despite the fact that I don't think Corbin is the sharpest tool in the shed, I think he really wants to meet the goals that are set for him. And the goals that are set now are the ones we've wanted the team to have for the past couple years.)