I have two hypotheses as to why that didn't work:
1 (most likely IMO): The motherboard doesn't generate on-board 5VSB, and as such doesn't trigger the logic to short the PS_ON pins when using that power source.
2 (still possible, and at least testable): the power button is a momentary switch, so it will only short out the PSU pins for a very short time, after which the PSU will switch off again. The motherboard, not getting an external 5VSB signal, will only have power for a fraction of a second while the button is pressed - if that, as the PSU is just turning on. This might not be enough time to properly initialize the power circuitry on the board to maintain the shorting of the PS_ON pin after the button is released.
Of course this is all guesswork. Did you try pressing and holding the power button with that board installed? If you have a multimeter, you try powering the board with the 12V input and checking for continuity between the PS_ON pin in the motherboard 24-pin and motherboard ground. If there's continuity, the motherboard does initialize the PS_ON signal, so your board should work, but might require a longer press to initialize fully.