Hal always said that he wanted to pursue a career writing music for movies, after his experience working in the Local Hero soundtrack, but according the credits only plays in "Freeway Flyer". Actually it's what he did after leaving DS.
Also John made some references during his concerts of the "Dire Straits History" or whatever that tour was called, to Hal leaving and apparently, besides what John says in his book, there were musical differences too that made everything difficult, a friend of mine from the UK that attended his local gig told me that John said something like that, very briefly, without giving more details. Actually I was surprised that John didn't said that in his book as it seems a more logic and "light" reason for Hal to leave, and instead told the story about the girlfriend and the dinners just inviting MK and John... but as LE says, people in bands come and go by different reasons.
About the "sad" calificative, I guess it's because of the great dynamics that the band had with him during the Alchemy era, but in my opinion that was even better with Jack in the band, so in that terms, Hal leaving was more happy than sad.