Never heard that Boz story. Not doubting you, but do you have a source? Very curious.
Finally found a moment to look this one up.
Below is a reference to a thread on Solo that claims this was the reason:
I read somewhere that it was for family reasons? Is this true, or was there something more to it? He is an amazing musician, and after watching Hollywood Bowl, I feel that his leaving is a loss to Mozzer's music. Any thoughts?
www.morrissey-solo.com
But I don't know how reliable this source is.
I also checked autobiography tonight, and Moz writes lots of really positive things about Mikey.
On page 420, he mentions that Tony V. told him that "Mikey is actually a very average musician" but Morrissey couldn't care less. Then, on page 448, Morrissey also mentions the incident at the Hollywood Bowl concert (of 8 June 2007) where Mikey presented him with a personal guestlist that Morrissey deemed way too long and costly, so he had to turn down Mikey's request, upsetting the latter. Once more money getting into the way....
Autobiography did not mention the reason for Mikey's departure, and I thought I had read it there. So perhaps I should have been a little more careful.