User blog comment:ZanaLyrander/Thoughts on Legacy Skins/@comment-10779726-20130729144546

This is based on opinions only so don't take it as fact, though the reasoning behind retiring skins is exactly what you've said: to make people want them more.

Let me elaborate, when people buy a car it's because they find it to be a necessity, something they need to get around and do things. Same as champions in LoL, you need them to play the game and it's an integral part of the game to allow people to buy them, thus Riot doesn't "retire" champions for being graphically out of date.

On the other hand, skins are vanity, a luxury that you can buy with real money in order to show off. You don't "need" skins to play the game and they don't offer enhanced stats or anything, thus Riot takes some skins off the market and makes them "rare." This artificially increases the value of each skin. Just look at Championship Riven, King Rammus, and other rare skins on e-bay.