It's possible that Michigan informed Ofili he wouldn't be asked back for a fifth year, maybe he had academic problems, maybe his family needs money. I have no idea what happened here but whatever story that comes out will be interesting. This decision is even weirder than the Shantee Orr one a couple years back.
The impact on next year's team probably won't be great. Watson, Massey, and Branch are a clear 1-2-3 at defensive tackles, and then you've got Will Johnson, Will Paul, Marques Slocum, and Terrence Taylor. The depth is fine. I wouldn't be surprised if this decision was Michigan's, not Ofili's.