Apparently, the official reason behind the release of Kaval from the WWE was unsurprisingly because the creative team did not have any future plans for him.
The release appeared to be a mutual decision between Kaval and the company, and was in effect earlier this week and was just announced today. Kaval will most likely be subject to the WWE 90 day no-compete-clause for released superstars, so don't expect him to appear in TNA or ROH in the immediate future.
In my less than professional opinion, I have to say that this is utter BS! Why would you sign somebody just to release them in a few months? Why have him win NXT season 2 if he isn't going to be utilized? Why run a second season then at all when the winner is released despite being over with the fans and half of the other contestants become lackeys?
Normally I try to give the creative team the benefit of the doubt, but there was definitely a place on the roster for him. He could have been an Intercontinental title challenger as the Smackdown mid-card faces are being run through by Dolph Ziggler. He could have been part of an outstanding tag-team to rejuvenate the division, his teaming with MVP a few weeks back highlighted his ability in this capacity.
Even if creative had no immediate plans for him, why do stars such as Primo and JTG stay hired when it is unlikely they will ever have a prominent place in the future. I wish Kaval all the luck in the future and hope he shows the WWE what they will miss without his talent.