This was what I was thinking when they first bought Boston Dynamic. Boston Dynamic was a huge DoD contractor. When Google bought Boston Dynamic, they explicitly said that they do not intend to be a military contractor and was expecting the existing contracts to expire [1].

The contracts that Boston Dynamic had with DoD expired in March 2015 [2]. My guess (BIG UNEDUCATED GUESS) is that the DoD doesn't take too kindly to its contractors not renewing its contracts and these military contracts contradict the corporate culture of Google. What's interesting is that they sold Boston Dynamic exactly a year after the DoD contract expired (donning conspiracy hat).

[1] http://www.nytimes.com/2013/12/14/technology/google-adds-to-... [2] http://upstart.bizjournals.com/companies/innovation/2015/01/...