Shawn Michaels and 1997 | WrestleZone Forums

It's a combination of things. First thing, just like you said, he was pretty banged up. Second thing, I believe at that time he was drowning in addiction(Drugs). Third, his ego wouldn't allow him to work a house show or TV(I remember him saying something like on one of his promos). Plus, He was a transitional champion, he knew it and I everybody else did, his job was to pass the torch to Austin. He simply got no business winning the title(Bret situation aside), let alone holding it for that long.

As far as the back injury, I don't believe it was THAT(career ending) serious. Especially after seeing all those crazy bumps he took during his second run.

I believe what happened was, shawn couldn't stand the fact that he was no longer the number 1 man in the company.

....just my opinion.