For the same reason that they let Tito "part ways" with them and for the same reason that in my 25 years working in the Law Department of a big company that I have seen a couple of hundred memos saying that an executive decided to retire or when not retirement age "decided to pursue other endeavors" aka they were all fired. Am I being conspiratorial? No, I am not, because in everyone of those cases a severance package was involved. I work on that stuff. Our severance plan, requires an involuntary termination. To the general work population and to the press and the outside world, there has been an amicable split-- a "parting of the ways". Your not really a business guy, so you don't see this stuff. I have. Iortiz has. They want Theo out, but they don't want to hang this around his neck or lynch him publicly. They will stick to the press releases and public statements, but trust me, he got fired. Theo told Buck the other night that he'd tell him some stuff if they had a beer after the game.
I think the story had to do with Casey Stengel. When he "parted ways" with the Yankees, they had a cover story that Casey had decided to retire. Casey was never one to pull a punch. When asked about it, he said: retired? Hell, I was fired. He ad just turned 70 when he got fired. The rumor was that it was due to his age. Casey said, "I'll never make the mistake of turning 70 again."
Casey got fired when a vastly undermanned and outgunned Pirate team beat the Yankees in the 1960 World Series.