Maybe because she's a crappy attorney?

I like how she notes that she's responding to two filings, one "allegedly" by her now former client. I know her client is in Iraq, but they do have phones and email over there. Can't she get confirmation of whether her client truly fired her? Would you ever want to retain the services of an attorney who couldn't figure out such a basic thing? We know that Taitz is only questioning the veracity of that letter for the sake of the public. I can't believe though that she has the gumption to do the same to a judge.

Can't they just disbar her now, and save a lot of time and trouble?

Just to amplify, information protected by attorney client privilege under the Federal Rules of Evidence and the requirement to maintain client confidences under a state's attorney ethics rules are related, but not quite the same thing.

The attorney-client privilege extends to a narrower category of information: information imparted to or given by, an attorney to a client, or by a client to an attorney, in the course of seeking or providing legal advice. It makes that information inadmissible, and usually undiscoverable, at trials or other proceedings governed by the rules of evidence. It must be invoked by the client and may only be waived by the client.

The duty to preserve client confidences under a state bar's ethics rules is much broader. It generally applies to any information imparted by a client to an attorney within the scope of their attorney-client relationship unless circumstances specifically indicate that the client did not intend the information be held in confidence.

However, under both the the states' rules of ethics and their rules (and the federal rules) of evidence, the right to waive confidentiality belongs solely to the client, not the attorney. Terminating the attorney-client relation does not change that. If Orly's former client invokes the attorney-client privilege, whatever protected information Orly thinks she needs to admit is not admissible.

In most states, both the rules of evidence and the ethics allow, and under very limited circumstances sometimes even require, a breach of attorney-client confidentiality by the attorney if necessary to enable the attorney to defend him or herself against a malpractice claim, an ethics complaint or to keep from being complicit in an ongoing or planned crime by the client. However, I am not aware of any rule in any state that allows a breach of client-confidentiality by an attorney facing Rule 11 sanctions. The attorney is responsible for having a good faith basis for believing the facts pled on a client's behalf and "that's what my client told me" isn't a defense if what the client is supposed to have said is inherently incredible.

Orly, however, being both completely incompetent and driven by a misson from God which frees her from the constrants of merely human rules, thinks she can just withdraw as attorney and spill out whatever client confidences she has (or makes up) in order to fulfill her holy mission of saving the world from the Evil Usurper.