I have no inside information, but from what I have tried to read between the lines, I think Palmer has been a class guy under low class management for years. He has occassionately been outspoken on players not doing their part or showing up late, but otherwise has been the good soldier. He steps forward and takes the blame for losses and happily shares the credit for success. He nearly always praises his teammates play.
I think he doesn't believe in the coach and hasn't for several years. I think he had something of an agreement or understanding with Brown, after several years of frustration, that if the Bengals didn't turn it completely around in '10 they would change coaches. Unfortunately for Palmer, they did seem to turn it around for that season and Brown re-hired Lewis. When the turn-around proved itself to be mostly illusory, but Brown stuck with Lewis, I think is was too much for Palmer who seees his career never going anywhere with this coaching staff. I don't think Palmer can stand to come back and give it his all, taking the hits he does, without believing they have a chance to win or even play to their potential. Even with this, Palmer has almost never taken his criticism (okay, maybe his frustration in a couple of mild comments) to the press. He doesn't point fingers and doesn't complain or make the organizatin look bad. Even now, feeling he has no other choice but to retire, he didn't blow up, blame in public or make this some huge, critical announcement (although I think few players so frustrated would have held thier tongue).
That Brown would punish Palmer instead of choosing to reward him with a gracious release after his long years in a horrible situation, or better yet trade him for value so nothing whatsoever is lost to the team in the situation is beyond me. It speaks of just how classless the owner really is. Brown may rightly fear other players will do the same, but none have nearly similar situations nor have served as face of the franchise for so long. Beyond that, I can only assume its Brown's petty, vindicative anger at Palmer for not believing in how Brown runs the team.