One reason that seems very likely is that Ghery's proposal as usual would end up being way to pricey and indeed Forest City Ratner, the developers said in the statement. “The current economic climate is not right for this design, and with Frank’s understanding, the arena is undergoing a redesign that will make it more limited in scope.” So what happened to his magic "Digital Project" software? According to the Times, the arena is now expected to cost $800 million, down from a projected $1 billion.
So as the situation stands right now, Ghery's initial design (topmost) will be replaced with the Ellerbe Becket design (below) which bears a close resemblance to their Conseco Fieldhouse, arena of the Indiana Pacers.

Still, I know as architects we don't particularly like to downgrade a design to make it cheaper but what was a no-no a few years ago is workable today if you want to have work.
Images obtained from: archpaper.com/e-board
For more info check: http://www.nytimes.com/2009/06/05/nyregion/05gehry.html?_r=1&hp
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