Why did the union victory win the Battle of Shiloh?

Good question.

It was nearly a Confederate victory. Grant was not expecting any action for a while. So he was caught off-guard and his army was nearly pushed into the river.

It was able to rally just in time - thanks to whom is uncertain. The arrival of reinforcements (somewhat delayed) under Don Carlos Buell may have been one factor.

Also one brigade, under John McClernand, had been kept on the alert throughout, and McClernand claimed, quite plausibly, that he had saved the situation. (Dramatically, he could also claim that the Confederate commander, the brilliant Sidney Johnston, had been killed outside McClernand's tent.)

This was making Grant look foolish, especially as McClernand was always giving interviews to the press, wanting credit for his brigade. Also McClernand was one of the 'politicians in uniform' always mistrusted by West Pointers like Grant.

Whatever the truth of the matter, there would always be bad blood between Grant and McClernand, and this is believed to have slowed down the Vicksburg campaign, when McClernand had raised a new unit that he treated like a private army, rather than an integral part of Grant's force.

Still, the Union victory at Shiloh was most significant. The death of Johnston greatly damaged Confederate effectiveness and morale, Western Tennessee and the Mississippi would be liberated before long, and Grant's reputation made.