While he might be "no longer working on Dungeons & Dragons" we don't know if he might be finishing out his two week notice sharpening pencils. Still, I am guessing this decision has actually been coming for some time, since the change over in the L&L articles. He came on board last September, IIRC, about six months ago, so a six month contract seems likely. It might also explain why after the L&L articles were shifted away from him he stayed around this long.
There are obviously different ideas of the way the fifth edition should be built. Anyone reading the WotC articles and blogs can see they haven't (up to this point) settled on one direction. But now they are at a point where they need to build the new edition in a more serious way, with much more direction, for the subsequent playtesting to have any real use for the designers going forward.
If, as I speculate, he wanted to go with the OGL and make full use of all the great design ideas that has generated over the last decade+, and management was opposed to doing so, then that would be a very good reason to walk. It might even be that they brought Monte on board because they wanted his OGC without having to use the OGL, because that is one way around it as would be buying it outright, and maybe Monte didn't want to give up the IP but would have been fine using it under the OGL and even expanding on it, because it would remain either his or OGC. We may never know but these are certainly plausible scenarios.
I have found the design process for 5e interesting to say the least.
In January it was announced that they had been working on a new design and had been hinting at it for almost a year in various articles like L&L and Rule of 3.
The initial follow on articles suggested that they were far less clear on their mechanics and decisions on what they wanted for the new edition. They started to pose questions on "What should be a Fighter" and "What should be a Cleric".
The first playtest at DDXP of the Caves of Chaos seemed to be the high water mark of the initial set of ideas.
Some time after that the articles started to change and seemed to discuss less content in what I would consider absolute terms.
It now seems that they are re-visiting topics that they did articles on before like Bruce discussing HP today or earlier this week the topic of "Clerics vs Paladins".
It seems the original plan and material has gone into the can and they are now doing a major re-design of their announced game plan at the start of January.
It has made me more worried on what is going on inside the design process that PaxE did not offer a new version of rules to playtest or even a new set of classes and play environment. Ideally they should have shown some progress in design and what maybe 3rd level is going to look like after showing off 1st level at DDXP.
I remember the design process for 4e when the initial announced design seemed to go through a radical change from what was promised with Playtests offered and initial class designs suggested.
It will be interesting if they leave just 2 desingers on the DnD 5e project or scramble to bring in a 3rd or 4th person to help share up some of the design load.
Bruce's blog on HP today and mention of Healing Surges suggests that they may be trying to push for a more 4e friendly design/similar design.
It will be interesting to compare answers to questions on things like how many classes and which classes will be part of 5e from the answers given at DDXP. The same will go for ideas of Themes and Backgrounds which seems to now be coming out that did not seem part of the original idea in January.
I'm also surprised that WotC did not make the announcement first. If they've known of this possibility for a week or more then they should have had a prepared statement with the usual 'regrets' and 'best wishes' and assurances that 'everything is going ahead'. It is interesting that it is not a Friday before a holiday which seems the normal popular date for Hasbro to release people they do not want.