I'm not usually one to go in depth on the Divas division, but I have to say that Beth Phoenix's departure is a big loss for that division and WWE overall.
While I do think the Divas are very beautiful and talented (my personal favorites being Beth, A.J., Natalya, Eve and Kaitlyn), I think Beth saw the writing on the wall. WWE has moved the focus away from the actual wrestling part and more toward the pretty model part. Hell, they scrapped the Women's Title altogether and renamed the entire division the Diva's division. I understand the marketing behind it, but that alone was an omen. With her contract up, she likely didn't see a good reason to continue with that direction.
Think about it. You see less and less Diva's matches lately (maybe one each on the big two shows each week). The matches are usually pit the same two ladies against each other for a month straight, and the Diva's Championship is defended less and less. The Divas are basically used now in backstage comedy segments, to push sponsor's products or in non-wrestling roles to further other angles. Maybe it's because the matches draw poor ratings or those in attendance use it for bathroom/food/merch breaks, so they pulled the reins back a bit.
If you look at it, at least in the WWF/E, the women's division has gone through cycles. The initial superstars like Moolah and Wendy Richter brought it into prominence all the way up through the early 80s, then it went more into the background as women like Elizabeth, Sherri (who was a great women's wrestler at one point) and others were used mainly as valets. Then, in the mid to late 90s, women like Medusa/Alundra Blaze, Chyna, Trish Stratus and Lita brought the athleticism back. But in the past 5 years or so, the focus has definitely shifted. They've pushed the supermodel types like Stacey Keibler, Candace Michelle, Kelly Kelly and the Bellas about as far as they could with that mindset. Now, all of those ladies have springboarded to other careers.
I think the WWE was planning to maybe swing the focus back to wrestling soon, but the fact that they lost Karma derailed some major plans they had for the division that could have kept Beth interested. When that happened, it seems, it put the division into a state of flux that they're still trying to mediate. However, you are starting to see some more athletic Divas take the forefront (A.J., Eve) after Natty and Beth had a short run, and there are some talented women in developmental right now that could help spark the next paradigm shift in the division.
Plus, with Beth now in a relationship with Edge (the circumstances of which are something I'm not going to get into because it's none of my business), you can understand the idea that she'd want to take some time away and enjoy the relationship. Plus, she may want to take care of Edge as he deals with the effects of his neck surgery. If they were both still on the road, she'd probably gut out the Divas situation to make it work. Now, with Edge retired and doing less work w/WWE, I think Beth sees one opportunity leading to another that benefits her on a personal level.
Like others, I didn't like the way she was apparently written off on Monday, but when a contract is expiring and it's known that the person is planning to leave, Vince doesn't usually let them go out on a good note. Ask Bret Hart. It's pretty much understood in the business that, unless there are extenuating circumstances, you put someone else over on your way out. In Beth's case, she was used to further the A.J./Vicki angle. I'm sure there's no bad terms here, but I understand why it was done like it was.
Hopefully, Beth will return to the ring sometime soon, whether it's in WWE, TNA or somewhere else. Maybe when the Diva's focus turns back to wrestling, Vince or Triple H/Stephanie will reach out to her and bring her back to be the standard bearer. She's a great talent who can definitely carry a women's wrestling division, if given the opportunity.