This. Michael was known to be a perfectionist, so it's understandable that he would be frustrated with quality issues. If the quality of the sound chip made it impossible for him to realize his vision, then he probably saw no point to continue. He probably didn't want his name to be associated with a product that was "inferior" to his other works, especially considering how his reputation was even before the scandals. I can't help but wonder what things might've been like if Sonic 3 was released on Sega CD, where they could have used CD quality music that would have allowed him more flexibility. I'm sure it would've been incredible. Maybe the zones were originally in a different order? Or perhaps those levels were original compositions and he didn't like them?