Actually, my take on it was that while she acknowledged she technically failed, she ultimately turned in her badge because she couldn't handle the questionable ethics and the emotional intensity of the job. Case in point: she executes one of the Ma-Ma clan members who was begging for his life, then later discovers he was the husband and father of a Peach Trees block wife and kid.
When she releases the hacker, she also says "I'm not going to be a Judge and I don't have to be a mind reader to know it." She goes on, "He's a victim not a perp and until my assessment is formally over I'm still entitled to dispense justice and that's what I just did, by letting him go. Maybe that will be the one difference I do make. The code to Ma-Ma's chambers is 49436. Let's finish this."
I don't think it gets any clearer than this as to why she turned in her badge. A Judge must be strict, no mercy, the law is black and white, but because she's a psychic she sees the grey areas. "Let's finish this" is another reflection of her realization that she is not cut out for the harsh code of being a Judge. Her spirit is too kind.
At the end, when Dredd says, "Your assessment is now over." This is far from an answer on whether she passed or failed and she knows it. The fact that she didn't even wait for the official answer suggests that she had already made up her mind.