The reasons that he's doing so make total sense to me, but be prepared for the onslaught of believers claiming things like "He got scared because he knew he was going to have to pay it out."
http://www.randi.org/joom/content/view/144/1/#i4It was March 6th, 1998, when the JREF Million-Dollar Challenge first came into existence. That’s almost ten years ago. It’s always been a simple, direct, matter: do what you claim you can do of a paranormal nature, and walk away with the prize. Our expectations at first were that we’d attract major personalities by this means, but they’ve avoided having to take the test by simply not applying; those who have actually applied are generally honestly self-deluded persons who have difficulty stating what they can do, which can be understood if they really don’t know what they’re experiencing; we at JREF have gone through involved procedures to help them recognize their problems. Usually, they have indicated that they don’t know what real scientific rules are, when it comes down to their actually being properly tested.
All this is obvious to anyone who has followed the action over the last decade. Now, while the JREF earns a certain income from having the prize money very conservatively invested, that sum could certainly be used more productively if it were made freely available to us.
As of March 6th, 2010 – twelve years after the challenge was first offered – it will be.
The James Randi Educational Foundation Million-Dollar Challenge will be discontinued 24 months from this coming March 6th, and those prize funds will then be available to generally add to our flexibility. This move will free us to do many more projects, which will be announced at that time.