okay a bit unsubstantiated i know but this is my thinking
after the Hero defeats Jyggalag and becomes the MadGod He takes the Shivering Isles as his realm (we can tell this is true because the Hero shows he has control over it i.e. changing the weather). This leaves Jyggalag beaten and without a realm to call his own. without a place to escape to and in a presumably weakend state so i think it is possible and likely that the other daedric princes saw an opportunity to finally get rid of a threat and took it. a certain prince of destruction may have been looking for an ego boost around that time as well
this could explain why there is no evidence of his existance in Skyrim because he was hardly known 200 years before during oblivion and then when he is killed theres no more greymarch to refreash the memory of him leading to him fading into obscurity
just a theory but knowing how ruthless the Princes are i wouldnt put it past them kicking someone they hate while their down