Hirai is considered an ally of CEO Howard Stringer, who was known to be at odds with Kutaragi before he announced his resignation. Sony has said Kutaragi will stay with the company, but solely in an advisory position.
It is also well known that Kutaragi's stubbornness and argumentative personality may cost Sony in the long run. He questioned the manufacturing practices of the console and went way over budget in development. Sony's gaming unit may not see a profit on the console for a couple of years because of that fact, and the PlayStation 3's current price is so high because of it.
Either way, his resignation is the end of an era, and Kutaragi will always be remembered for his work at Sony.
Source:
BetaNews