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From my viewpoint, and again I might not be seeing all the angles, is the short-sightedness of the Pokemon Corporation in this action. My daughter, then me, then her younger sister ONLY got into Pokemon through the multiple YouTube videos of people playing Pixelmon through Minecraft. She got into it from people local in our community who also play Pixelmon. What has followed from here is that both my daughters have sought out books on Pokemon, trading cards, posters, an eevee from Build-A-Bear with a Pikachu likely forthcoming and other Pokemon licensed items from which they receive commanding royalties. Now when you multiply this by the vast numbers of other families whose kids (and parents) play who only also got into this through Pixelmon and buy several licensed products that Pokemon Corp benefits from, it makes it even more shortsighted on their part.
Hats off to all tremendously talented and gifted folks who collaborated to develop these products. Like others who've commented above, I too would like to see the final 5.1.2 version, not just for selfish enjoyment, but also as a credit to those who have dedicated their energies for the enjoyment of others.
No one is going to sit back and convince me that Mojang hasn't added a few memberships and Pokemon hasn't garnered additional merchandise purchases and royalties as a result of the creation of Pixelmon.
Plus, when you think of all the other popular platform mods (like Lego as an example) that sit on top of Minecraft adding to the additional profiting of everyone else except the developer, I can't help but think of the opportunity to be made by all. Overall, more times than not, the lack of collaboration leads to competition.
However with the new game the main selling point will most likely be an open world with Pokémon freely roaming around in it. So pretty much what Pixelmon did. And for the sake of keeping their sales high they eliminated it. The number of Pixelmon players that might not buy that game now is much lower than those that could have gained knowledge and switched to us once the first trailers hit - and potentially stick with it and not buy theirs etc. Also better to get rid of it now, before it might get even more attention, which would make it an even bigger shock in the community...
In the end the little bit of money they might potentially maybe make off of Pixelmon players buying some merch - or the few people who wouldn't have bought an original game without this mod - doesn't compare to the money they could lose out on if we kept going...
(Also this is just my own theories, nothing official.)