I spoke to a Watford fan about this very subject quite recently, also my own dismay at the possibility he could be sacked. My views were the same as a few others, he'd done a good job but not so good in the second half.
His point was they don't really hire a manager at Watford to do everything, for the very reason that if the manager leaves, they have to start from scratch with everything. So when Quique does go, they just need someone else to come in and just manage the first team most of the other stuff is run by a load of other people. So I think the club had enough of it and have decided to try something else.
The other point he raised was that players that do well are continually dropped for someone else, so continuity was often broken. I think this is probably where he lost the team and they probably lost respect for him. Sometimes it works when you drop players, but to keep dropping players who were also performing has been a bit if a sore subject at Watford.
I'm not a fan and I don't watch them play, just the motd highlights and other bits in the paper. But from the point of view of someone I know who goes all the homes and some aways these were the main points. He wanted him to stay, but said he wouldn't be surprised if they let him go.