If I had to guess, I'd say they took advantage of his weakened psychological and emotional state. Over time, it wouldn't have been hard to spot. He found anchors in that world, mostly in the friend he was closest to. To make matters worse, it was the Princess, yes? If the nobles were behind this, they likely wanted to use her for their own aims. If the Hero stuck around or became her husband, those plans would be blocked. They may have even wanted a foothold in the Royal Family by trying to get her to wed one of their sons. Waging war was out of the question, and assassination not an option against a summoned Hero who erased a problem they couldn't handle, whether because no one can, or they'd just make him a martyr. So they orchestrated everything to get rid of him, by destroying his reputation.
“Humans... and how I love you talking monkeys for this... know more about war and treachery of the spirit than any angel.”
VIGGO MORTENSEN - Lucifer (The Prophecy, 1995)