Can it be that I was never asked and never answered this question? *whimpers* I am afraid to answer it and find out that I already answered it once before and said the opposite. But since Devin asked...

It was time. Sometimes I don't quite understand these things myself.

I think the biggest reason was a looming sense that Egelric had to lose something he loved. He had achieved perfect happiness this autumn -- he had Iylaine and Malcolm and his grandchildren, he had his sons with Sela and his daughter with Lili, he had Lili, he had come to feel comfortable in his castle and his role as knight, and he had just found Finn again. Aside from the things he had lost forever, like his father or his first wives, he had everything he wanted. He was perfectly happy. And Egelric has always suspected that the gods couldn't allow that to last long. As Lili herself thought in "Egelric is an old devil":

Lili laughed at the humor of the scene, but more than that she was laughing to see her husband so gleeful.  His grim face when he had come in must merely have been due to his own superstition about letting the gods see him too happy.

I don't think it was because they were too boring in their happiness. Lili and Egelric were always fun together even when they were happy, and there was potential for Egelric to really grow out to his full potential... which was not necessarily the kindest creature on earth, but as we saw when he was setting up Ethelwyn for the practical joke of the lifetime at that famous Christmas party, Egelric with the full measure of his old-devilment in him was a sight to behold.

But more than anyone else, I sometimes think that this story is the story of Egelric, so it was time to turn another page.

The other big reason was certainly the Hetty / Alred / Leofric triangle. I knew it would take something catastrophic both to rattle gentle, timid Hetty into doing something shocking, and likewise to rattle Alred into a moment of inattention to his wife, and even unintentional cruelty. Lili's death seemed like the thing.

Now that she's gone, though, it will surely affect the story in lots of other small ways. For example, Connie and Eithne only got to stay with Egelric for a few days, but that was long enough for Osh to consider it evidence that Eithne's (and hence Dantalion's) presence was the cause of his strange sleepiness. And if Connie & Eithne had stayed with Egelric permanently, the whole Flann-Cian showdown wouldn't have happened, and also Connie probably never would have met Malo, or scarcely would have seen him. Sebastien also probably would not have killed himself, and so on.

And there is also the interesting fact that Egelric is a bachelor again, which is precisely what Gwynn has long feared. And Maire may find him to be a rather fearsome creature as well.

And on and on. I miss her terribly, but there's no denying the story wouldn't be what it is or what it will be if she hadn't died. So it goes.