The New York Times reports no comment from Papermaster, and quotes Apple as saying that Bob Mansfield, Senior Vice President of Macintosh Hardware Engineering, is taking his place.
There is a good deal of speculation that the change was due to all the controversy over the iPhone antenna design, but no one except senior Apple executives and Papermaster himself know for sure. Some media reports have quoted Apple insiders as saying the iPhone antenna design was done before Papermaster ever came on board.
Also, Apple has never admitted to an antenna problem, and firing Papermaster could put Apple in a weak position defending the antenna design. One can spin just about any theory about the executive change, but until someone says something official it's just speculation.
[Via the New York Times]