I was in like 2nd grade when he left (i think) here are some rumors i heard starting with the most popular:
1. He was tired of playing Steve and being embarassed, so he ran off the road comitting suicide, running into a power pole (or a tree i cant remember).
2. He comitted suicide (jumped off a building).
And on the show, Devon Werkheiser (Ned's dECLASSIFIED) said he heard a lot a crazy rumors too.