It may be that it just caught up with him. Or maybe he got too antsy for the CEO role.
Ballmer has lost almost all of his original group of Presidents (I believe Qi Lu is the only survivor). If the board is worth anything, they have to be real pissed at him- all potential successors have now left the company. Microsoft's politics are legendary and Sinofsky was seen as one of the few who could navigate them, now he's out.
I wouldn't be surprised if the board of directors had some extremely harsh words for Ballmer.
If Sinofsky worked (successfully) somewhere else for a few years it should make him a stronger choice as CEO.