Because when everything was "Merry Christmas", other holidays really and truly were being ignored. It would be hard for most retailers to list every possible holiday in the month of December in an ad or on a sign, so they use one all-inclusive term: Holidays. It might slight a few, but it certainly doesn't slight "everyone". Many Christians have noted on this thread that we don't mind the use of the term "holidays".
Fitswimmer, the rest isn't really directed at you, just continuing on the topic...
I can only speak from my own experience, but I have never seen or heard of a non-Christian organization planning boycotts against retailers that say "merry Christmas", and sending e-mails around to warn their friends of these "slights". Retailers aren't "afraid" of offending anyone, and they're not "cowered into burying the "C" word"

. They've decided on their own to be inclusive of all the holidays in December.
Some people make assumptions that retailers have been bullied onto the "holiday" bandwagon, but by whom? They disagree with it, so what do they do? They decide to bully them into saying "merry Christmas" again.

Don't they see that they are guilty of exactly what they perceive the minority of doing?
If it's not OK to pressure a store into using Happy Holidays, it's not OK to pressure them into using "Merry Christmas", either. Let the retailers choose to say what they want.