[MENTION=83838]cibet[/MENTION], that is a worthy question that deserves a straight answer. My sister just asked me about this today when we were discussing these posts.
There are two main reasons.
First, the truth is that the company was thriving, but the principals weren't. Everyone went deeply into debt to launch Wizards, and further to try to survive through the lean times of the lawsuit. Magic: The Gathering almost didn't happen at all. Friends and family teamed up to help people make rent and car payments to they wouldn't go bankrupt before the game could be released. We thought Magic was a blast to play, and the art for it looked gorgeous, so we hoped everyone would like it, but we didn't really know. It was an enormous gamble, and everyone put everything on the line.
When Magic hit it big, it was an exhilarating roller coaster and hugely gratifying, but we were all still broke. We got into this weird state where the company was thriving but the principals weren't. The new employees were fine, because they were being paid and weren't trying to dig out of deep personal debt, but the principals were drowning.
Wizards tried to address this problem by doing a stock buy-back some time before the Hasbro deal, and it did help a great deal, but mainly it put most of us back on track with where we would have been if we had normal paying careers and hadn't bet everything on Wizards. Most of the principals were still carrying some debt.
In the end, the principals were tired of being broke.
Second, and this was a critique I discussed repeatedly with some of the principals at the time long before things reached the breaking point, Wizards began with a startup culture of working long, hard hours, sacrificing like crazy to try to get things moving and to do a good job on them. As anyone who's been through a startup knows, this is both exciting and exhausting. At some point a company needs to transition out of the startup mode to avoid burning out its employees.
Wizards never did.
Several of us saw this problem coming. Everyone worked so hard for so long that they were burning themselves out even while they were having a blast. Houses fell into disrepair, people put on lots of weight and got sick a lot, marriages fell apart, and more, all while Wizards itself was thriving and everyone was having a blast working on something they loved.
Workaholism was epidemic at Wizards. Wizards invested in an exercise room, classes, great offices, and everything they could to make it a blast to work there, but that only made people not want to go home to the lives they'd been neglecting. The problem with working for your favorite company in the world is that you never go home. At least one person stopped going home and had to be told he wasn't allowed to live at work. More than anyone else, the principals were happy but exhausted and needed to stop trying to go go go at 110% all the time unless they wanted to die young.
In the end, the broke and burned out principals pretty much all needed the sale in order to get their lives back into order and stop being broke.
After leaving Wizards, more than one of the principals lost a bunch of weight and got their health back. Some rescued marriages while others moved on to new relationships. Some sold off neglected houses at a loss and bought new ones they committed to taking care of properly. The money itself spread far and wide, used to start new, more sustainable game companies; for healthcare and college funds for family members; and into retirement funds for parents and grandparents whose early loans made the company's survival possible during the lean times. A couple spent everything they made just getting back to break even. There are a few small piles of money here and there, but over half of it has gone back into the community that made it all possible.
In short, they had to sell the company to survive as individuals.