I haven't talked to Michael Bentley since his most recent announcement, but I do know that he had talked about shutting down The Foundry as far back as 2000 or so. It follows that the market for ambient & experimental CDs has dropped off since that time, and he probably shut down The Foundry for the same reason most small label owners give up. That is, the financial equation becomes more and more difficult, while the work involved in releasing and promoting and selling a CD stays the same, so often people start wondering whether it's worth it.
I'll miss The Foundry. I think Michael had a unique aesthetic sense, and good taste, not to mention that his own music was quite good too. Maybe we'll yet hear another eM album in the future, whether or not it's on The Foundry.