The reason the film has been pulled off the shelf is simple. Image Entertainment, which owned the license to this and another John Carpenter film, Prince of Darkness, had to give up its rights to these films when said licence expired well in advance of 9/11/01.

Universal Films, the owners of both films, just released a special edition of They Live in Germany and will likely release that and Prince of Darkness in the US within the next year. They did that with Silent Running and are doing that with Cat People, both of which are former Image titles given new transfers and extras for their Universal re-releases.

Simple as that.  No conspiracies here.