The upgrade wasn't sudden, and happened over 2 years ago. It's about time that this...I don't know if I should call it a rumor or what...stop being repeated. Like many, many software projects, Matz realized that his ambitions for Ruby 2.0 were just a little too grandiose, and so he set 1.9 as the "now" upgrade and 2.0 as the future.
Essentially what it breaks down to is that there was a lot of work on making the VM faster (i.e. switching to YARV) and at the same time there was work on some pretty severely back-compat-breaking changes. It became clear that the performance improvements were needed sooner rather than later, and this needed to happen in a way that didn't break backwards compatibility (1.9 really is not that different from 1.8 in the grand scheme of things).
Another thing to keep in mind is that, when this decision (that 1.9 should be a "sooner rather than later" performance release) was made, the alternative implementations were not as viable as they are today. I suspect that if JRuby from today was transported back in time to 2 years ago, Matz might have said "Use JRuby while I work on 2.0"...
