"Alcohol, Tobacco, and Firearms" sounds like it ought to be a great convenience store

I suppose the justification was that they would then watch the straw buyers in order to nail higher-ups.

But then there's the possibility that it was all about creating an "incident," not about stopping guns at all:

The AK-47 used to gun down fellow federal agent Brian Terry, once recovered, would no doubt have been identified by ATF as a weapon recently purchased from a US gun dealer on the southwest border (ATF would have had, after all, the serial numbers and other identifying documentation).

There would have been no need to mention the existence of any ATF ‘secret sting,’ Operation Fast and Furious, or any links between these ATF endeavors and the movement of the weapon used to murder Terry across the US border and into the hands of his Mexican assailants.

Instead, the discovery and identification of the AK-47... as one sold by a US gun dealer and then trafficked ‘illegally’ over the border into Mexico and into the possession of the cartels might have created a ‘perfect PR storm,’ neatly reinforcing the arguments put forth, first, by Mexico’s government, which contends there would be no gang violence in that country if the US didn’t supply gangs with guns; second, by higher-ups in the US government who favor tougher gun-control laws and non-intervention in Mexico (DOJ and the Obama Administration); and, third, by the public anti-gun lobby in America.