It seemed like the densest stupidity.

What is the explanation of it?
The only explanation of it is to be found in the character of Columbus.
We must try to see him as he is in this forty-second year of his life, bargaining with notaries, bishops, and treasurers; we must try to see where these forty years have brought him, and what they have made of him.
Remember the little boy that played in the Vico Dritto di Ponticello, acquainted with poverty, but with a soul in him that could rise beyond it and acquire something of the dignity of that Genoa, arrogant, splendid and devout, which surrounded him during his early years.

Remember his long life of obscurity at sea, and the slow kindling of the light of faith in something beyond the familiar horizons; remember the social inequality of his marriage, his long struggle with poverty, his long familiarity with the position of one who asked and did not receive; the many rebuffs and indignities which his Ligurian pride must have received at the hands of all those Spanish dignitaries and grandees--remember all this, and then you will perhaps not wonder so much that Columbus, who was beginning to believe himself appointed by Heaven to this task of discovery, felt that he had much to pay himself back for.

One must recognise him frankly for what he was, and for no conventional hero of romance; a man who would reconcile his conscience with anything, and would stop at nothing in the furtherance of what he deemed a good object; and a man at the same time who had a conscience to reconcile, and would, whenever it was necessary, laboriously and elaborately perform the act of reconciliation.

When he made these huge demands in Granada he was gambling with his chances; but he was a calculating gambler, just about as cunning and crafty in the weighing of one chance against another as a gambler with a conscience can be; and he evidently realised that his own valuation of the services he proposed to render would not be without its influence on his sovereign's estimate of them.