"Why? Because they were 'known' to intelligence services already, so why were they not being monitored? why had they not obtained court orders to monitor their phones, etc?"
On a yearly basis roughly half a million intercept warrants are applied for and granted to security services, police and other agencies. So who is to say that the Woolwich murderers, who were already known to the security people, were not under surveillance?
Even so, judgements have to be made about who requires 24 hour observation and who falls into the category of "religious nutter". Imagine the resources needed to monitor the UK's internet population and you might begin to see why wee Johnny Reid and his buddies at G4S (don't laugh) are anxious to get their hands on some nice fat government contracts.