I don't think it's a case of Pakistan refusing to police the FATA. It's because they can't unless they commit huge resources to that part of the country which would mean less money for trying to keep up with the Indian military. Pakistan is a young nation and it's borders, like so many other ex European colonies wasn't really thought through. The ethnic make up of the FATA is mostly Pashtun, the same ethnic group that make up the majority of the Taliban.
The tribes of the FATA are fiercely independent and throughout it's short history the Pakistani Government has pretty much kept it at arms length. Pakistan has lost a lot of soldiers fighting America's so called War On Terror and I guess some time ago they came to the conclusion the war is unwinnable so have pretty much backed off.
Funny thing is though the drones that violate Pakistans sovereignty are probably flying out from airbases leased by the CIA from the Pakistani airforce. There's an obvious delicate political balance being played out here. So while Pakistan would like the drone attacks to stop they do understand if they ask the CIA to get out then aid would stop and the US would be really really furious.
I do find it odd that Panetta said US sovereignty had been violated due to 9/11 and so gives them the right to launch unilateral drone attacks. That's quite a silly thing to say and one that could easily back fire. It's kind of like Cuba saying their sovereignty had been violated because one of their passenger jets had been blown up by anti-Castro terrorists who now reside in Florida so Cuba has the right to launch unilateral drone strikes in the US.
