Because he's an very injury prone defender, and Liverpool didn't want to stand in the path of him rebuilding his career now he's reached mid-20's after devoting all his football years to them.
Not only that. In his 5live interview tonight, Parrish openly admitted that almost all of their targeted transfers had failed to come-off over the last 3 months, with players choosing other clubs over CPFC. And that's with PL money.
Parrish (on 5live tonight) admitted they would spend £10m on a single player if they had to, and had tried with that fee for Caulker. PL money on a different planet.