Will Bohemia-Moravia eventually be integrated into the German Reich? Germany's borders look so much prettier and complete with all of the Czech state, and there's all that sweet, sweet industry.
It's better to keep a Czech puppet state. "Pretty borders" is not a geopolitical concern, and this way Czech industry already belongs to Germany with the added benefit of a local collaborationist government. For example, the Czech Partisans (the guys who took out Reinhard Heydrich IOTL in Operation Anthropoid) will have a lot less support as long as the Czech people retain nominal independence and the semblance of their own country.