You really should look at what happened to Argentina when they defaulted in 2002. It's still causing problems today.
In all fairness, I said they'd get the *ability* to bring the spiral under control, I didn't say they'd actually exercise that ability :-) The way things are now they don't have the option of currency controls!. If they get the option there is still the possibility that they abuse it.
From Greece's PoV, it's better to have the ability to control and not need it rather than needing the ability to control and not having it!
The austerity measures proposed would leave them with indefinite debt that can never be repaid. If the option of staying in the EU means that they'll be debtors for the rest of time then they may as well take their chances and default on the debt instead - defaulting at least gives them a chance.
Think about it this way: Let's say you are in debt, and the only penalty for defaulting is lower credit rating. If your creditor asks you to sell your means of earning money (say, sell all your computing equipment, car and house) as part of "austerity measures" before they give you any more money, you are better off defaulting on the debt. Their austerity measures will handicap your ability to repay the debt anyway, so why not default?
This is the state that Greece finds itself in, and the EU knows full well that if a precedence is set regarding defaults then just about all the weaker/debtor economies in EU will consider defaulting as well. After all, countries leaving the EU can still trade with China, Middle East and the whole of Africa for essentials - maybe the Russians too. It won't be perfect, nor better, but it will be an option. Trading with the strong economies do not work so well when you don't control your own currency.