So after wading through the various posts, ramblings, and wild speculation on the subject, I'm of the opinion that no one knows the reason Negroponte is stepping down as Director of National Intelligence to become Rice's #2.

The official story is that Negroponte was never happy as intelligence czar, wants to return to diplomacy, and, according to the Times, Rice has been "trying to recruit him to bring more Iraq expertise to her office." Various commentators speculate that Negroponte felt hemmed in by the Pentagon and viewed his cabinet level position as having no real power: (Martin Sieff, UPI)

Negroponte through most of his tenure as DNI privately made no secret of his frustration that long-serving Defense Secretary Donald Rumsfeld -- the Pentagon controls 80 percent of the overall U.S. intelligence budget as well as direct control of about a dozen of the nation`s intelligence agencies -- refused to work constructively with him and jealously retained operational as well as financial control over the DOD-controlled intelligence agencies, leaving the DNI out in the cold. [...] Negroponte`s evident willingness to accept his transfer and apparent demotion suggests that he had come to the reluctant conclusion that frustration and powerlessness were inherently built into the position of DNI, whoever ran the show in the Pentagon

The turf-war-with-the-Pentagon angle is the subtext behind this tidbit from the above Times piece:

[A]dministration officials interviewed on Wednesday would not say whether Mr. Negroponte was moving because the White House saw him as uniquely qualified for the diplomatic post, or because President Bush was dissatisfied with his performance as intelligence chief, or whether it was a combination of the two.

Negroponte was unhappy with Pentagon control of intelligence. In this administration the Pentagon is the White House. He thus pissed off the White House, and, thus, got demoted. That's one explanation.

Another explanation informs the "uniquely qualified for the diplomatic post" speculation cited by the Times. Erstwhile Kos apostate Booman summarizes the view as follows:

Condi Rice cannot handle her position as Secretary of State but there is no position to move her to. It would be too big of a blow for Bush to fire her but he cannot get rid of her by retasking her. Negroponte is being brought in to run the State Department, while Rice will remain a figurehead. After a period of time Rice may take a job in the private sector citing burnout or ill-health or something. Negroponte has been assured that he will take over the top spot at some not too distant point in the future, or has been satisfied that he will be in the principles meetings and this is just for show.

In my opinion the most reasonable guess here -- applying an Occam-brand wild speculation razor (five blades and two aloe strips) -- is that some flavor of one of these two explanations is true. I'd like to point out, however, that the two explanations are somewhat mutually exclusive. I don't see how the Times can hypothesize that what's going on is "a combination of the two": if Cheney had it in for Negroponte it doesn't seem very likely to me that Negroponte was also chosen to bail out Condoleeza Rice, unless perhaps Condoleeza Rice is at war with the White House.

Wading into the blogosphere beyond the boring explanations, we find a post on Democrats.com that opened the barn door of the entertaining variety of wild speculation:

Everyone is trying to figure out why John Negroponte would take a demotion from Director of National Intelligence [...] There's a very simple reason: Karl Rove has chosen Condi Rice to run for President, and he needs to line up her replacement so she can resign in March and begin her campaign - before she has to answer subpoenas from Joe Biden

Let's just say I hope the above is true because it means Karl Rove has gone, as the kids say, batshit insane, and also let's just say that if the above turns out to be the real reason for Negroponte's move I will bite my ass.

Also apparently in a crazed attempt to get someone besides masochists to read The Plank, Michael Crowley offers

Because standards are lower on weekends... here's a new rumor straight from an insidious "Washington cocktail party": John Negroponte is becoming deputy secretary of state as preparation to replace Condi Rice when she leaves her job. Why would she do that? To take over for an "ailing" Dick Cheney as vice president. Sure, Cheney resignation rumors are about as old as the Bush presidency. But one well-informed person said that, while he doesn't think this will happen, he also doesn't dismiss it out of hand.

which I really hope is true, however, I actually find the above slightly more credible than the Karl Rove backs Condi in '08 scenario, so, you know, if Cheney resigns in March, I'm not biting my ass, and, further, on the ass biting, I'd just like to say while I don't think this will happen, I also won't dismiss it out of hand...