I like Nate Silver's explanation:
So it may not be that undecided voters are gravitating to Trump so much as anti-Trump Republicans are discouraged. Trump faces unusually high levels of intraparty opposition for a front-runner — or at least, he had seemed to until the past two weeks. But Kasich and Ted Cruz are also deeply flawed, and somewhat factional, candidates. It’s asking a lot of voters to cast a tactical vote against Trump when that tactic requires (i) going to a contested convention in order to (ii) deny the candidate with the plurality of votes and delegates the nomination in order to (iii) give the nomination to a candidate they don’t particularly like anyway. The #NeverTrump voters might not be voting for Trump, but they might be staying at home. They aren't voting for Trump, but they don't like any of the alternatives.Trump is increasingly likely to be the nominee because there simply is not a credible alternative around whom his opponents can rally. The only candidate with even a mathematical chance of beating him is Cruz, and outside his base of hard-core conservatives he is not very popular. Few Republicans outside the Cruz camp are going to throw their souls into stopping Trump if the result is nominating Cruz.
If we go back to the "lane" model that pundits were using early in the race, it seems to have unfolded like this: because Cruz was a much more formidable candidate than Huckabee or Santorum, he has expanded the evangelical Christian/extremely conservative lane up to around a third of the party, squeezing the other lanes. Meanwhile Trump built his own lane, taking in voters of all ideologies for whom Republicanism is mainly an identity, mainly about whose side your are on and who your enemies are. Trump used his television and twitter skills to take out the candidate he most feared, Jeb Bush, who for his part wilted pathetically under Trump's fire. The reduced establishment lane was for a while divided among several candidates, to the benefit of Cruz and Trump. By the time the dust settled the only surviving establishment candidate was Rubio, who just isn't very impressive. Plus one reason Republicans usually rally around the front-runner is that they like winners, and Trump was clearly winning. So the establishment lane dried up, leaving establishment-oriented Republicans nowhere to go but home.
It's an interesting lesson in how much more complex the variables are for a race with eight real candidates than they are in a race with two or three. It is also a testament to the political skill of Donald Trump, and to the bad state of the national Republican Party.
A bit of confirmation from a paragraph on how politicians in Indiana are reacting to John Kasich's decision not to contest the state:
“I have no idea if I’ll vote for a presidential candidate now,” said Jim Merritt, a state senator from the Indianapolis area who had been inclined to back the Ohio governor. “I am very disappointed.”