I think there is a ring of truth in the bit about it just being jockeying for position with the costs of the convention center.
Not a lot of cities are well equipped to handle a convention the size of Gen Con (25,000+ attendees over 4 days). It's one of the biggest conventions in the country, so only a few cities can really handle it. People like to point out Chicago, Orlando, and Las Vegas as alternate sites (reading the linked thread to the Gen Con forums was quite enlightening as well, about some of the downsides).
Chicago: It's next to impossible for smaller vendors to show up at the dealer room, since there are cumbersome rules about union labor and having to hire union workers to set up booths et al, at exorbitant rates that mean only the biggest vendors could even afford to go there. Since the Exhibit Hall is a crown jewel of Gen Con, that's a big negative.
Orlando: Getting away from the midwestern heart of the convention, a convention in Florida during hurricane season (how many years until the convention is cancelled becuase of a storm?), high prices down in Florida too. I know I'd not be able to go probably if it was that far away.
Las Vegas: Far, far away from the homelands of Gen Con, outrageous prices too. It's too far to drive, and flying anyplace isn't worth it anymore. Moving Gen Con that far west also pinches on Gen Con SoCal, and their strategy of an eastern (de facto "main") Gen Con and a west-coast Gen Con.
Indianapolis seemed to fit like a glove with Gen Con, and Peter Adkinson knows it. Indianapolis knows it, and Gen Con moving again would mess with a winning formula.
I'm believing the theory that Indy wanted to raise the rates on the convention center because Gen Con is such a success, and Peter was performing a negotiating tactic to keep the prices down by suggesting it might move someplace else.