They're getting squeezed financially. Few, if any, D3 coaches make the D1 starting salary of over $100K. I would even venture that a D1 assistant makes more than most D3 head coaches.
Add in the cost of scholarships, travel, and the fringe benefits (private weight rooms, lounges, meeting / film rooms, and you're talking a pretty penny.
If the sport doesn't generate the revenue to cover the expenses, it can become too much of a burden to a cash strapped school without $$$ infusions from the alumni and corporations.
So they drop down to D3, offer aid that drops the cost to about $25K - $30K, cut travel, cut coaches & salaries and it becomes affordable while still keeping the student body number up. Even if the $$ giving cuts back, the sport becomes financially viable within the D3 framework.
Tradition stands little chance against a sea of red ink.