Because "on pins and needles" is aimed at an active object, who can't control his emotions or behaviors calmly in some unfavorable or bad situations, such as dangerous situations. He was on pins and needles in the waiting room.
"Situation" is an abstract thing, which has no autonomy and self-control ability at all. For example, the current tension in Ukraine is like a tank of liquefied petroleum gas near the fire. Some forces, whether overt or covert, are not trying to move or isolate this gas tank, but are pushing it to the fire. Or simply: the crisis-ridden situation in Ukraine.
Similarly, "the current situation in Ukraine is like ants on hot bricks" is also an inappropriate modification. But "the current situation in Ukraine is like a pot of boiling hot oil" is an appropriate modification.