The force spent 18 months working on a fresh inquiry into the 2002 killing only to be told by the Crown Prosecution Service a suspect identified could not be prosecuted due to past blunders.
The original case infamously collapsed when serious police errors came to light, leading to the convictions of five men being quashed.
Chief Constable Gareth Morgan launched a fresh investigation last year, saying he hoped he could finally achieve justice for the family of promising footballer Mr Nunes, 20, of Whitmore Reans, Wolverhampton, who was gunned down in an execution-style killing on a country lane.
Detectives not involved with the previous scandal-hit probe pored over thousands of documents and re-tested evidence using new techniques as part of the new investigation.
But despite all the man hours and costs involved, the CPS ruled a case being built against a suspect could go no further because of the history, dashing the hopes of the Nunes family.
The CPS said it would have been an "abuse of the legal process" to pursue the suspect. The Chief Constable opted against handing the investigation over to another force last year.
Mr Morgan said: "I share my disappointment and frustration with Kevin Nunes’ family that at this stage we are unable to bring justice for them.
"The decision I made to reinvestigate the original inquiry was a significant one for Kevin’s family, the wider community and the force, but absolutely the right one to make.
"The original investigation was undertaken many years ago and since then things have changed significantly with robust governance and scrutiny guiding how the force operates under a new overarching legislature."
The office of Staffordshire Commissioner for Police, Fire and Crime, Matthew Ellis said the decision to reopen the case was the responsibility of the Chief Constable and would not be drawn further on whether it was right to do so.
Mr Ellis said: "The decision to reinvestigate by the Chief Constable was an operational policing matter.
"The significant police failings in the original investigation of this 2002 murder lie at the heart of this issue.
"It’s so sad that a young life was lost and justice has still not been achieved for the family."