So, what's going on here, did the directors of ESA say something to offend someone?

I think it's more a money / time thing than something the ESA said. I could be wrong but 4 major devs pulling out seems financially motived even if the companies aren't necessarily linked.. Personally I think its a good move. I don't think the industry needs a "public face". And surely it doesn't need paid for.

Our industry needs a presence in Washington to keep the politicians' hands off of us. We are a ripe target for all the muck-raking charlatans on Capitol Hill who want to make a political career for themselves bashing us. Make no mistake, as with any other economically viable industry in the US, lack of political representation will lead to unwelcome legislative actions against us.

If we were to read between the lines, it's obvious that the departed publishers and developers are sending a not-so-subtle message to the ESA. And that message appears to be disenfranchisement and disagreement with ESA's current leadership and policies.

When and if EA drops out, there will be capitulation at ESA. Without EA, there really is no point of ESA's existence.

Activision + Vivendi are a pretty large chunk of the publisher business already. If EA doesn't drop out but others do, then I'll start some conspiracy theories just for fun.

E3 was pathetic last year. Either bring it back to its original glory or put the final stake it its heart.
All major publishers have their own mini-shows (like Ubidays) so why do they need to spend money at some half-assed show?
Argue all you want about the crazy hype machine that was the old E3, but it did get our entire industry on every major news channel and mag cover. Now, the press doesn't even bother to show up.