It’s a power struggle and Liz won. That’s Washington for you. Her power is with Baghdad Jim. As long as he’s in power, she stays in power. However, once Baghdad Jim loses (we hope most sincerely it happens soon), Lizard Liddy will receive her comeuppance. Tom Foley’s wife, Heather (and she’s a dragon too) controlled the parking spots. She also controlled Foley’s office. With parking at a premium, you can your booties, Heather wielded her power like Lizard Liddy. These emails weren’t about an erroneous name. It was about Lizard Lizzie exerting her power.
Over time, in her new job, the name Liz might start to grow on her. She better hope so, because she's permanently stuck with it. Or, she could apply to Barbara Boxer's office, who has a special appreciation for irrational name-touchiness.