He could have gone that route when the federal investigation started, or even when it was ended. Instead he dug in his heels. It's too late for the tearful admission and Oprah appearance. I'm not even sure Oprah's still alive? Anyway, the denials are too recent and too unequivocal to go back on them now. He'll have to wait about 5 years from now to play that card.
As far as what he'll do now? I don't see any other option but to fight. He may as well since he's gone this far. The idea of not participating in the proceedings, taking his ban and then claiming that "the process is rigged, I never had a chance, so I wouldn't participate in their kangaroo court" sounds good on its face. He can still claim he's a victim and hope that much of the evidence doesn't get out. There are a few big problems with that strategy, though. First, USADA can put anything it wants to in its finding of fact, including whatever witness testimony they have (Google Kirk Obee vs USADA to get an idea). Secondly, the witnesses are all going to be getting sanctioned themselves, so even if they don't say a word the story will basically be out regarding who flipped on Lance (I'm talking about you, George). Lastly, there are the other cases out there.
In short, much of the evidence is going to get into the public domain anyway, so if he doesn't fight it he won't even have a chance to challenge the evidence. My guess is that they'll fight it and challenge any and all evidence, knowing full well they'll lose. They'll do it as part of the continued PR plot. It seems to be the strategy to which they've committed and I don't see them changing course at this point.