Why does this Biwire set-up not work?

Anything's possible, but I'm guessing it won't make any difference.

And if you do not notice a difference, simply sell one set.

-IMO

It's strange, on my Krell monos today I moved the right channel speaker wires from the bottom to the top posts to get them out of the way of the power cord. The soundstage and focus was completly lost.

I have to make some assumptions since your discription of what you are doing is very incomplete.
I assume you are trying to bi-wire a single pair of speakers that have dual input jacks on each speaker.
The problem may be just in the speakers crossover setup.
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One reason it does not sound right might be that your speakers using that method MUST have a separate crossover, external to the speaker for it to work. (My Infinities were ok to biwire, as is, because the crossovers took care of the problems anyway., but my Maggies need a special setup, to be able to do so. The Maggies crossover does not easily lend itself to bi-wiring, though it can be done)
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Another way this may be going down, is that the amp is trying to "see" two sets of speakers and is getting only one and thinks 'this is screwed up (low impedance) and the amp is self limiting it's output. (But that would be assuming your amp is pretty smart)
Have you stuck the two sets out wires on one only set of jacks from the amp, to the dual sets on the speakers? That would eliminate my "amp" worrying/thinking theory.
After that... who knows

What do you mean by "not right?"