After confirming his departure from Iron Man 3 via Twitter, Jon Favreau went to Hero Complex to explain his decision in more than 140 characters.

Favreau insisted there was no bad blood between him and Marvel.  He simply wants to direct The Magic Kingdom for Disney, and that’s all.

and I both came of age together. The years that we shared were a
pivotal experience. Kevin has a firm grasp on the many franchises and
how they all interweave and I am happy that I had the opportunity to
establish the world that these characters can now play in…. Iron Man has given me tremendous opportunities and Kevin [Feige] and I are enjoying a lot of momentum in our careers thanks to the Iron Man films. I look forward to seeing what others can do playing in the same world.”

explained he really wanted to play in a new world, one that would fire
him up as a filmmaker and wasn’t  “loaded with built-in expectations.”  
His love for Walt Disney and Disneyland runs as deep as any fondness
for superheroes: “Between the theme parks and the movies, the Disney
iconography was probably the first set of archetypes that I was exposed
to. Walt was able to expose me as a child to the full array of emotions,
including fear and sorrow. Those movies and attractions haunted my
dreams and made a deep impression on me as a child.” And now he wants to
bring them to life (the film is about a family who causes the rides to
come alive), and play with more family friendly entertainment again.

I said in the initial news post, I’m sad to see Favreau leave the
Marvel universe. He brought a lot to it.  When the dust settles on the
superhero decade, I think we’ll find that Favreau and Christopher Nolan
defined it, for better or worse, and ushered in something massive that
will leave its mark on a generation.

Ultimately, the reasons and
gossip as to why and how don’t matter. He doesn’t want to play with Iron
Man anymore, and he’s choosing to walk away.  He’s not going to bog it
down with negativity or exhaustion. You have to respect that. We’ve
often begged for directors to do the same with their respective
franchises. Good for him for having the self-awareness and self-respect
to do so.

I also suspect this is the first whisper of an
interesting and promising future for Disney.  Remember, they also have
David Fincher working on 20,000 Leagues Under the Sea (news reconfirmed by Disney and Favreau) and Guillermo Del Toro working on The Haunted Mansion.  They have Andrew Stanton working on John Carter of Mars
They have Pixar. I don’t think we’re looking at the same
direct-to-disposable-DVD company that we were in the past.   Something
is brewing, and the fact that three top notch directors are in on its
beginnings should excite or intrigue every film fan with a pulse.  

So yeah, Iron Man 3
will have a new director. We’ll bitch about it if there’s cause to. But
for now, there’s a bright side, and I’m going to be a bit cheesy and
look at it. I don’t really give a damn about any gossipy tidbit that
might leak, or what anyone (with the possible exception of Robert Downey
Jr.) thinks about Favreau leaving.  It’s the past. It doesn’t matter.
We’ll look to the future, and hope everything discussed here earns our
ticket money and the time we spend geeking out about it.