From what I've heard, that was his decision -- once he had kids, he wanted to make movies he could watch with them. And while the Nutty Professor and Dr. Doolittle movies were mediocre, I can find very little to dislike about either Shrek.
Murphy had been holding his legendary concert film 'Delirious' off of DVD for a long time because he is embarrased about the language and gay bashing. It just came out with an apology from Murphy on the disc.