I think there were several reasons. Firstly, the entire cast was pretty much sick of the show after season 6. The move to California gave everyone a few more creative options, but they were pretty short lived. Marshall wanted to move on to directing (was in talks w/Belushi prior to his death), McKean had "Spinal Tap", and Cindy had just gotten married and wanted to start a new chapter in her life as a mom. The only ones who were pushing to keep the show running were the suits.
I don't believe the great "Penny vs. Cindy" feud theory, but it's pretty reasonable to assume that working 60+ hour weeks for 8 years would make everyone sick to death of each other.
I do beleive that the producers (Garry Marshall included) made some pretty unreasonable demands on a woman in her second trimester. The show was known for it's physical comedy, and that doesn't come without some significant bruises. I can imagine that CW was more than a little concerned about her safety and that of her unborn child's. The schedule of a sitcom actor is gruellling even on more sedate shows, much less ones as "active" as L&S.
I've always been a little curious as to what role Bill Hudson (Cindy's now/soon to be Ex) had in her decision making. Every time I see him interviewed lately and he's whining about how his eldest daughter (Kate Hudson) has cut him out her life, he comes off like a completely unlikeable jerk. I seriously doubt that he was any kind of a support system for her.
IMO, leaving L&S, even with all the strife, was the worst career decision that CW could have made. Not only did she lose out on much of the syndication $, but the subsequent law suit against Garry Marshall and Paramount did very little to endear her to Hollywood's power brokers. L&S went off the air in '83, and she really didn't get fully back into the public eye until the last 4 years or so.