It's not a budget issue. The passes are already paid for (and will not be refunded), so there is $0 cost saving from pulling them.
Although there's no official statement from the school on the issue, I overheard an interesting conversation yesterday between a cop and two irate students on this issue. The students complained they could no longer get to work. The cop replied that students were abusing the passes --i.e. traveling to rival neighborhoods to start fights, going places after curfew, etc. The students replied by asking why everyone should be punished for a few bad eggs.
Their conversation ended in a stalemate, but at least it provided me with some perspective on what otherwise seems like an inexplicable decision.
The article above specifically denies the passes were pulled for behavior issues, but that may just be a face saving statement by CPS. The cop also suggested that there might be liability issues for CPS if their students get in trouble while traveling on their free bus passes --I don't know if that is correct or not.