Because she caused fast, massive damage to the UK economy with her economic plan on which she was already advised was untenable even during her leadership race with Rishi. Yesterday there was a vote on banning fracking with a three-line whip on Tory MPs to vote no, but which many Tory MPs are very much for, which was very controversial, with bullying and forced voting using physical means (physically pushing the MPs into the side to vote no by force). Suella Braverman yesterday also resigned as Home Secretary leaving a letter calling out the UK government as basically incompetent...
The Fracking thing was just simple tactical incompetence and thus definitive proof Liz wasn't up to the job.
I think this might cause some second thoughts, at first for Tories, about whether it's actually a good idea to ask their membership who should be Prime Minister.
Many of these MPs knew Liz wasn't fit for this post from the outset, but their own party's rules said they should allow ordinary members (a few thousand people who are disproportionately old, white and male IIRC) to decide from the best two put forward by MPs. The members, in effect, picked the woman who said the things they wanted to hear, even if those things were nonsense. If those members were your general electorate, then arguably the country gets what it deserved - but they're not, they're just the party members. If you thought US party primaries were a bad idea, well, yeah, that.