It is obvious that China cannot allow India or the US to open up a Consulate in Lhasa.
Tibet and Xinjaing are restive and China is at sixes and sevens to take a firm grip on both these areas. They have tried every possible trick in the book - repression, threat, indoctrination, pouring in unheard sums of money and so on. Nothing has worked for China and China is in dire straits over both these region.
If one has diplomats in Lhasa, they cannot be asked to leave, as China does for all foreigners when there is any lock-down China organises to curb the restive people of Tibet. Thus, these diplomats will have a 'bird's eye view' of the reality and repression that China does first hand. That would expose China in its true colours.
China also fears that the Consulate would become a centre for the Dalai Lama's supporters and the Tibetans in general. Naturally, China is apprehensive of people they call 'splittists'. These people could catalyse the aspirations of the Tibetan people, now under Han bondage. This could also encourage the the 'splittists' of Xinjiang and then bring the Chinese dream of mining the vast natural resources of these two virgin regions that is fuelling the Chinese economy, as also it would create a 'break' in the oil and gas pipeline that is connecting China to the CAR hydrocarbon reserves.
A consulate in Chengdu is of no use to India since it does not serve any purpose.
It is a request and it has not been accepted and that is all.
I am sure the GOI knew that it would be a hard nut to crack.
Maybe, it was done to put pressure on China and expose her political weakness wherein she is scared to open up Tibet to the world and yet claim that Tibet has so wonderfully integrated itself with China.
In fact, as one could see it, it shows that China is being false about bringing normalcy to the Indo China relations. The offer of Chengu as a location for the Consulate indicates that China is totally scared of Indian (read Dalai Lama) presence in Tibet and is merely trying to go tangential to the core issue.
The not allowing the Consulate in Lhasa shows to the international community that Tibet wants self determination and that in itself proves the point that the world wants to see and which will debunk all the Chinese protestations that Tibetans are a happy lot.
It is, as I see it, a good diplomatic pressure on China.