I believe Boeing told them the stairs would only open to a certain degree..
Here is some info from Aviation Exchange
That the airstair didn't lock down when deployed indicates that it never fully extended. It is likely that the air loads simply prevented full extension. The airstair hydraulic actuators were not designed with the strength necessary to overcome a 170-knot airstream, especially on early 727s. The extension was limited by the airspeed and subject to fluctuations with changes in the airstream and the weight of Cooper upon the stair.
The aft airstair was partially deployed for the duration of the approach and landing.
The transcripts of ATC communications between NW305 and various ground stations are freely available (and a fascinating read). The relevant communications (with Reno) begin on PDF page 87 (numbered 213). Below are the mentions of the airstairs from that point on, with times given in PST, 1971-11-24. I added the text in brackets for clarity.
22:35, NW305: OKAY AH WE'RE TRYING TO MAKE CONTACT WITH [Cooper in] THE BACK [of the airplane] NOW AND AH WE'RE GOING TO GET THESE STEPS UP BEFORE WE CAN MAKE OUR LANDING...
22:43, RENO: NORTHWEST THREE ZERO FIVE WHAT'S THE STATUS ON THE STAIRS NOW SIR
22:43, NW305: AH WE HAVEN'T BEEN ABLE TO GET AHOLD OF ANYBODY [in the back of the plane] YET UH TRYING TO CONTACT HIM AND THEY'RE STILL DOWN SO I WE HAVEN'T DECIDED YET AH WE MIGHT COME IN AND LAND WITH THEM DOWN THERE'D BE SOME SPARKS SO
22:48, NW305: APPROACH AH THREE ZERO FIVE WE CAN'T SEEM TO RAISE HIM BACK THERE WE KIND OF HATE TO WE'D JUST AS SOON LAND WITH THE THING HANGING DOWN IT ISN'T ALL THE WAY DOWN AND THEN PROBABLY WON'T HAVE ANY PRESSURE ON IT SO WE HOPE IT'LL (unintelligible) FREE...
22:57, NW305: ...WE'RE NOW MARKER INBOUND AND UH AH WE'RE GOING TO BE LANDING WITH THE AIR STAIR IN THE DOWN POSITION AH WE DON'T SEEM TO GET ANY RESPONSE FROM OUR FRIEND IN THE BACK
[The aircraft touches down and is taxiing.]
23:03, NW305: SEE ANY SPARKS COMING OFF THE TAIL AT ANY TIME ON AH TOUCHDOWN
23:03, RENO: NEGATIVE NONE AT ALL THE ONLY THING THAT'S VISIBLE ON THE TAIL IS LIGHT AH APPARENTLY ON YOUR RAMP
23:03, NW305: ROGER UNDERSTAND STAIR LAMPS AH STAIR LIGHTS
23:03, RENO: I DO SEE SOME AH SPARKS NOW JUST A FEW AH TRAILING YOU AH AS YOU'RE TAXIING IN
23:03, NW305: OUR AH PASSENGER TRIED TO DISEMBARK
23:03, RENO: I STILL DON'T AH GETTING A FEW SPARKS NOT VERY MANY AT ALL
23:03, NW305: OKAY WE'LL TRY TO SLOW OUR TAXIING HERE AS MUCH AH IT PROBABLY IS DRAGGIN AH
Why did the crew not retract the airstair before landing?
The airstair can only be operated from two positions: one in the main cabin and one on the exterior of the aircraft. It cannot be operated from the flight deck. The testimony of Tina Mucklow, the flight attendant whom Cooper interacted with almost exclusively, reveals that
Approximately four minutes after takeoff, [Cooper] stood up, told [Mucklow] to go to the cockpit and close the first-class curtains, and for no one to come out from behind the curtains.
It should be noted that the airstair was still closed and locked at this point. In fact, it was Cooper himself who performed the deployment:
...he asked her to demonstrate to him the procedure for opening the rear door and extending the stairway. She did this and was under the impression that he understood how to do it. She commented that it occured to her at this time that this was the only function of the aircraft which she had discussed with the hijacker during the time she had been with him which he did not seem to be fully aware of.
Even though before Mucklow left Cooper in the cabin "...she pleaded with him to take the bomb with him and he said he would take it with him or disarm it...", nobody could be sure, so complying with his demand for no one to enter the cabin was the obvious choice. Even after the crew suspected he had jumped, there was still some chance that he was present. That—on top of the clearly dangerous situation of being unrestrained in an airborne jet transport with a door open—compelled the crew to sit tight in the cockpit and land with whatever configuration they could control from there. Indeed, third officer and right-seater on the flight Bill Rataczak stated that
...no member of the crew departed from the cockpit to check on the presence of the hijacker following the arrival in the compartment of hostess Mucklow, who had locked the door behind her.
How did the airstair remain partially deployed on its own?
The airstair is in contact with the tarmac when deployed on the ground. In fact, it's designed to essentially wedge itself against the ground and act as a tail stanchion to keep the airplane from tipping backward during loading and unloading. Early 727s such as N467US had mechanical locks for the airstair in both the extended and retracted positions to accomplish this function.
However, the crew had evidence that the airstair was not locked, as Mucklow "observed the red indicator light go on the [flight engineer's] panel indicating that the stairs had been lowered." On the 727-100, that light would be de-energized only if the airstair was locked either up or down. (On the -200, a green light was added to indicate a fully extended and locked position.) The ATC transcript indicates the captain's later belief that the airstair wasn't "all the way down", so it's reasonable to assume the warning light remained illuminated.
That the airstair didn't lock down when deployed indicates that it never fully extended. It is likely that the air loads simply prevented full extension. The airstair hydraulic actuators were not designed with the strength necessary to overcome a 170-knot airstream, especially on early 727s. The extension was limited by the airspeed and subject to fluctuations with changes in the airstream and the weight of Cooper upon the stair.
The inability to fully extend the airstair in flight was even known on the ground beforehand, as the transcript of communications between NW305 and the airline's base at MSP reveal (I cleaned these up):
18:38, MSP: DON'T KNOW OF ANY WAY TO LOCK STAIRS IN AN INTERMEDIATE POSITION.
18:40, NW305: ...STAIRS WILL OPEN ABOUT 20 DEGREES AT 120 KNOTS. IS THAT ENOUGH FOR AN INDIVIDUAL TO ESCAPE THE AIRCRAFT?
18:40, MSP: WITH HIM ON STAIRS WILL OPEN POSSIBLY ENOUGH FOR HIM TO GET OUT. REMAIN UNPRESSURIZED. BE IN LANDING CONFIGURATION WITH FLAPS. SLOW TO [APPROACH] SPEED BEFORE TRYING TO EXTEND STAIRS.
As it turns out, the stair could not be opened much if at all at 170 knots during a climb, and the captain had to "have 'er about down to a hundred and sixty knots" and level off at 7,000 feet to get the resistance low enough. It makes sense that a higher angle of attack would cause a greater air load on the door due to the increased frontal area. It also makes sense that the airflow alone would be insufficient at any speed to completely re-close the door due to the geometry of the empennage, the weight of the stair, and some hydraulic damping. Once the door was open, the crew were able to climb again to 10,000 feet and keep the airspeed "in the vicinity of one seventy, one eighty [knots]".