ATP politics kicked in. After 2008, Shanghai's contract to stage the YEC came to an end. There had been a prior agreement that Shanghai would be compensated by being made into a Masters tournament so that Asia (and especially China) would continue to have a showcase major tournament. At the same time Ion Tiriac and Manolo Santana wanted to turn Madrid from indoor hard-court to clay and they persuaded the ATP to agree. So Hamburg was unceremoniously bumped down to a 500 event and its place in the ATP clay calendar season given to Madrid. Shanghai, which had formerly been staging the YEC, then slotted into Madrid's former place as the first of the two autumn/fall hard court Masters.
Clearly this demonstrates the impressive clout that Tiriac, Santana and the Chinese have with the ATP. But it's not nearly so impressive as the utter lack of clout that the Germans apparently suffer from that the ATP could just demote their top tournament without so much as a by-your-leave to accommodate Madrid and Shanghai's ambitions. I raised a thread about this once before and still don't know how the ATP justified all this to the Germans and whether they even bothered to try!
There was a legal battle between the ATP and the Hamburg tennis authorities in the second half of 2008 when Hamburg sued the ATP for its attempt to demote Hamburg, and the ATP won. Nadal and Federer both spoke out in support of Hamburg at the time.