The blow out preventers are built with huge rams inside that are pushed together sideways hydraulically, and they have solid rubber fittings on the ends designed to either seal around a round drill pipe, or close flat together to seal a hole with no pipe in it. The blow out preventers wiegh tons ( 18 tons on my rig) are are mounted on the top of the large round steel casing that is cemented in the top of the hole. I worked helping drill 18,000 ft holes on land and the top casing was 36" round. More casing was cemented into the hole in smaller diameters every thousand (?) feet or so to hold back the pressures that we were tapping into underground. The extremely powerful hydraulic pumps that pressurise the blow out preventer's rams are gone as the rig is ruined. The blow out preventers also work best when the pipe that they close around is straight and verticle. I'm just guessing that the fact the the pipe and casing was bent over sideways when the rig sank, that there is a lot of pressure sideways on the bent pipe and the chances of the automatic blow out preventers rams sealing around that pipe is not good.
It's probably a lot faster to drill another hole to try and seal the well than to try and cut the casing, move the huge BOP's, and then try and attach a wellhead to the casing, all working at a mile deep.
Trying to crush the casing flat with a huge explosion would be a crap shoot IMHO as there is a small open (5"?) pipe inside a 36" piece of steel casing that is cemented into the hole with smaller casing cemented into it as well. There is probably enough pressure at that depth to keep the oil flowing through any hole and if the top of the formation was fractured by the blast then the oil would just seep up through the new cracks in the rock. I worked on one rig where things started ouzing up out of the ground around our rig camp which was about a mile from the well. We cemented in more casing quickly to stop the fluids creeping up throough the rock.
At least if the top of the hole is left intact then there is something to work with if drilling other holes don't work. The real problem is trying to work a mile deep with ROV's is like trying to grab the stuffed toy in the arcade box with the smooth three pronged grappling device.
I'm also assuming that when a relief hole is drilled that casing will have to be cemented into the rock and a well head installed on the seafloor so drilling mud and cement can be pressured into the hole. This udertaking is not a speedy process. I'm also guessing that the new hole may need to be drilled deep enough to reach under that bottom of any casing that has been cemeted into the formation in the original well.
There can be a lot of pressure exposed in the Earth's crust when a long column of rock is drilled out which has held back pressure for millenia. People I worked with on land based rigs saw hundreds of feet of 5" pipe pushed out of a hole like spagetti so there can be a tremendous amount of pressure to overcome in order to seal the hole.
A mile deep is just so deep to work at, and try to imagine trying to force very heavy things sideways up off the sea floor as well as cutting through thick steel.
If you ever watched the old well head fire fighting movies starring Red Adair the fire fighters used to blow out the fire with dynamite, cut the casing at the ground level and mount on a flat flange, add a well head ( huge valve) to the top half of the flange which was on a huge swivel, swing the valve over the gushing oil well in the open position and then slowly close the valve. Attempting to just quickly squeeze off the powerfull flow of oil might cause the casing to rupture or for it to get pushed out of the hole.
It's been about 20 years since I worked the rigs and some information above may not be accurate but hopefully most of the ideas provide some interesting information. Hopefully Clownshoes can check my information for validity and correct any possible mistakes.