Having gone to considerable lengths and expense to bring McAlister back to New Zealand in 2009, they felt his commitment once he returned was questionable.
He was unfairly rushed back into the All Blacks in 2009 when he wasn't fit or ready. That left him exposed to cruel public commentary about his ability when the fault lay with the selectors for taking an unjustifiable risk.
But no one is too sure why McAlister drifted so lamely after 2009. He only played three Super Rugby games in 2010, showed a bit of form with the Maori and was maybe closing in on All Black recall when he suffered yet another facial injury in the latter rounds of the ITM Cup.
A promising start to 2011 quickly faded. McAlister went missing in the back half of the Blues campaign and ended up being shifted to fullback because he was such a liability on frontline defence.
The All Black coaches lost interest in him. They wondered whether he still had the desire to be a great player. If he'd been in their thinking earlier in the year, he certainly wasn't in their plans by the end of Super Rugby.
Which was a problem, because McAlister had signed a contract with Toulouse that required him to be in France by August 24 if he wasn't in the All Black squad - and he had also signed to play a full season with Harbour.
By being honest and professional, the issue could have been easily fixed. But McAlister spurned that route and instead just didn't turn up for training with Harbour. He went awol. When he did surface a few days later, there were stories of a sick child, followed by a request for an early release which sent the NZRU's anger off the scale.
The game would quickly descend into chaos if more players held their contracts in such disdain and treated their employer with contempt. That was the final straw - the point when the NZRU decided to wash their hands of McAlister.
They wouldn't be letting him go without full compensation and when Toulouse said there was no way they would pay, McAlister had to stay with Harbour. A release was agreed this week because it would have been churlish and spiteful of the NZRU to have refused.
If he hadn't been in France to register, Toulouse would have terminated his contract. McAlister and Toulouse chipped in to buy him out of the last few weeks of his Harbour obligations.
If there is a positive out of this sorry tale of unfulfilled promise, skewed advice and poor choices, it is that McAlister has been a failed test case for the concept of players heading overseas young and returning to New Zealand.
When McAlister, at 23, signed with Sale in 2007 and Aaron Mauger, at 26, joined Leicester, there was talk by leading agents that this might become the norm; that rather than players head offshore at the end of their career, they would do so in their prime and try to come back a couple of years later.
It seemed a little petulant at the time, but All Black coach Graham Henry turned out to be prophetic when he said in October 2008 that he didn't believe McAlister was developing by playing in the UK.
"When he returns to these islands he'll be a well-rounded person but I don't know if he's going to be a better rugby player. Maybe those experiences of playing in those countries will help but whether it's going to help his rugby development, I'm not sure."
That notion is all but dead now. McAlister proved that those who leave for Europe face an enormous challenge assimilating on their return. The pace of the game here is hard to pick up after a long time out.
Not only that, but the Northern Hemisphere places a heavier emphasis on gym work ahead of skill development. He was bigger and stronger when he returned, but McAlister never looked the same instinctive, naturally creative player after 2009.
More significantly, the NZRU will be wary of bringing players home in future. McAlister let them down - he didn't show the hunger or desire they thought he would and if nothing else, he has at least made the union conscious of their need to be hugely selective in future about who they bring back.
