Sounds like USAC back in the 70's when they did their best to kill off the indy open wheel racing series by making rule changes that penalized those who were bringing the most money to the sport. That's why CART was formed by the owners.
Now I don't know dung from shinola about Rally Racing, that's a disclaimer for my next un educated statement.
It would seem to me that running a 450 on a Rally of that length would put a pretty big strain on that moto. Fretigne, is a factory rider no? I wonder how many engine changes he has throughout the rally? I would think........that as a privateer a bigger motor with more torque would require less revs and be more reliable.
I don't know how much time, or notice was given to KTM, but, seems to me they have been working on that 690 motor for several years now, and obviously spent a great deal of money developing it. And like I said before KTM has been putting a lot of money into the sport, and to piss them off to the point where they pull out of the series is not such a great idea. They have a great 450 bike so hopefully they will be back with it in the future.