He was burnt out. He needed a break. And however long he was the coach at IU, he was going to see continually lower results.
I'd never argue that Mike Davis was a better coach than Bob Knight, but for that particular team, he was a better fit.
In all honesty it burns me up just talking about it 10 years after the fact that it's still a point of conversation that overshadows the tremendous story of this year's team.