I have a feeling that had KK's transfer targets been of the right type (e.g. Modric rather than Beckham), the board would have made more serious efforts to pursue them. Reading between the lines, they weren't impressed with his suggestions, went their own way, and KK feeling under-mined, quit.
in a nutshell, although this is just opinion like most of the stuff here.
If it's true that the likes of Modric and Woodgate came here for talks though, then maybe they weren't impressed with those and brought their own targets in over his head. I don't believe for a second that Keegan was targetting the likes of Beckham and Lampard, or Henry. I think they've just taken that radio interview from ages ago where the media spun it, and have used it as ammunition against him to clear their names.