The main reason season 4 was cancelled was due to Irwin himself. The network had renewed the show for a fourth year but cut the budget right down, something that Irwin could never agree to and so he cancelled the show himself.
JB
Kind of. According to Wikipedia, which quotes from the 1992 book Lost in Space Forever":
Allen claimed the series could not continue with a reduced budget. During a negotiating conference regarding the series direction for the fourth season with CBS chief executive Bill Paley, Allen stormed out (of the meeting) when told that the budget was being cut 15% from Season Three, his action thereby sealing the show's cancellation.
In Guy Williams' final interview in Starlog, he stated that Irwin wanted to "fight the network and hand everyone a new season on a silver platter." That, of course, didn't happen. At no time, though, did Guy Williams state he was leaving the series.