Why did Ali Adler leave the show?

Short answer: She was let go because the ratings drop from Season 1 to Season 2 was dramatic and hard. That, plus the fact that the LGBTQ+ angle was introduced and championed by her and led to a wide desertion of the show by the more conservative "family" oriented members / fans and the LGBTQ+ community itself.

Please understand, I'm not implying in any way, shape or form that the introduction of the LGBTQ+ angle was incorrect or unwarranted (as it pertains to the Alex and Maggie characters), but a large swath of the Season 1 crowd who stuck around for Season 2, even with the network switch from CBS to the CW, bailed quickly when the show started going into the LGBTQ+ domain for a variety of reasons.

Truth be told, a lot of the backlash and vitriol (much like the Batwoman controversy with Ruby Rose), if I recall correctly, came from the very community itself who felt that the portrayals were token and inaccurate and to a degree, very formulaic. Many simply couldn't stomach the portrayals and were quite toxic in their vitriol toward the characters and the show.

Side note: There were also rumblings from some quarters that she was sort of a "control freak" and that the cast and crews found her quite difficult to work with and many were threatening to walk if she was kept on.

My understanding is that she signed an overall deal with CBS Studios and left her full time gig with Supergirl, a Warner Production, to develop projects under her new deal with CBS. I think the Dynasty reboot was one of her first projects under this deal. She was going to serve in a part-time advisory role on Supergirl during the transition.

The ratings drop from S1 to S2 was expected as the series moved from CBS to CW and most likely played no part of her exit. I think she just followed her paycheck over to CBS Studios.

Short answer: She was let go because the ratings drop from Season 1 to Season 2 was dramatic and hard. That, plus the fact that the LGBTQ+ angle was introduced and championed by her and led to a wide desertion of the show by the more conservative "family" oriented members / fans and the LGBTQ+ community itself.

Please understand, I'm not implying in any way, shape or form that the introduction of the LGBTQ+ angle was incorrect or unwarranted (as it pertains to the Alex and Maggie characters), but a large swath of the Season 1 crowd who stuck around for Season 2, even with the network switch from CBS to the CW, bailed quickly when the show started going into the LGBTQ+ domain for a variety of reasons.

Truth be told, a lot of the backlash and vitriol (much like the Batwoman controversy with Ruby Rose), if I recall correctly, came from the very community itself who felt that the portrayals were token and inaccurate and to a degree, very formulaic. Many simply couldn't stomach the portrayals and were quite toxic in their vitriol toward the characters and the show.

Side note: There were also rumblings from some quarters that she was sort of a "control freak" and that the cast and crews found her quite difficult to work with and many were threatening to walk if she was kept on.

They knew the ratings would drop dramatically, that is not why she left, as was said she was under a contract with CBS not WB. It is as simple as that, as were several of the writers. It is a big duh that dropping 1/2 the tv % is going to drop the ratings. It stayed one of the highest $$$ makers for the advertisers on the CW until ALL THE SHOWS STARTED DROPPING in that regard.

Kelly wrote:

"They knew the ratings would drop dramatically, that is not why she left, as was said she was under a contract with CBS not WB. It is as simple as that, as were several of the writers. It is a big duh that dropping 1/2 the tv % is going to drop the ratings. It stayed one of the highest $$$ makers for the advertisers on the CW until ALL THE SHOWS STARTED DROPPING in that regard."

*****

Did they? What was the % drop when it was on CBS for S1? Irrespective of the contract and which network she was signed to, she was let go. Go back far enough in time and you see the divisions within the community and the dramatic drop (specifically on this show) viewer-wise across the board as S2 progressed.

Remember the CW initially passed on picking up the Supergirl project when it was pitched. It was only when CBS stepped up for a S1 order and the ensuing waffling with the show's renewal when the-then CW President (Nina Tassler) retired/was pushed out midway through S1, did the CW bring it on board. Also note, the ratings dropped substantially on CBS itself (from the premiere high of 12+ million to a season ending 6-7 million) which is why the network was having a devil of a time deciding whether to renew it or not.

Whatever the reason(s), Adler was let go somewhat unceremoniously (she did keep creative consultant and co-creator credits though) and was assigned to work on a Dynasty reboot, soon to be followed in S3 by Andrew Kreisberg's removal (for reasons already discussed at length).