Marty had the reputation of being a very good regular season coach but a poor playoff coach. After the Chargers lost in the playoffs they just came to the conclusion he would never take them any further so they fired him.
Edit: I think there may have been some issues between Marty and the GM or the owner as well.
I think this is the basic gist of it. They went one and done in the playoffs and were eliminated at home by a not great New England team (this was the year the Colts won the Super Bowl with Dungy and Manning). Then they had a bunch of assistants leave and Marty wanted to bring in his brother as DC and for some reason that was a big sticking point with their GM at the time. They were good for a couple of years immediately after that, but haven't been in serious contention in over a decade.
Their lack of self-awareness just blew me away. Three years before that they had the worst record in the league. And it's the Chargers we are talking about, not like they have a long history of success by any means. Not sure on what planet 14-2 is unacceptable for a franchise that has one Super Bowl appearance in their history (and they got boat raced in it, too).