Maybe there was some tension between the two men. Wood is said to have believed that the quality of writing had slipped under Feldstein and Feldstein described Wood as depressed and resistant to criticism. Anyway the fateful day came when Wally delivered his famous last stories...all newspaper strip parodies... and Feldstein rejected them as "sloppy." Wally turned around and walked out for good.
Wood fans have long waited for someone to publish those last sloppy pages and finally someone has. Here (below) from the just published bio "The Life and Legend of Wallace Wood Vol.1" are the comic strips that got Wood fired. Was Feldstein right? Were they sloppy? Judge for yourself.
My guess is that Feldstein's plan was to contrast deliberately long-winded dialogue with with over-the-top funny drawings. Unfortunately Wood had a painful medical condition that he attempted to self-medicate with alcohol. He also had a sleep problem. He just wasn't in a funny mood. Even so, you could argue that Wood's material was still adequate and Feldstein should have used it.
How would Wood have handled characters like these when he was healthy and inspired? Here's (above) an example of how he treated Little Orphan Melvin in the days when Mad was still a comic book.