Why does Holmes let Ryder go?

Ryder is the thief who is found to have stolen the blue carbuncle in "The Adventure of the Blue Carbuncle." However, at the end of the story after Ryder has confessed himself and begged, "God help me! God help me!", Holmes seems moved by compassion and tells the man to get out of his flat, without making any move to prosecute Ryder. He explains to Watson that he is doing this because he does not believe that it is his responsibility to "supply the deficiencies" of the police, and moreover, the failure to prosecute Ryder cannot result in the conviction of another innocent man. He feels that Ryder has been "too terribly frightened" by this case to continue on and commit any other crime, but "send him to gaol now, and you make him a gaol-bird for life."
Holmes is also somewhat moved by the fact that it is Christmas, "the season of forgiveness." His primary concern, however, seems to be the fact that Ryder is not a born criminal and is more likely to become one if sent to prison for this act than if simply allowed to go free on this occasion. Holmes knows he is committing a "felony" of his own in doing this but ultimately judges it the best course of action.