The most important and obvious reason: The Indians simply beat them.
In Moneyball, Billy Beane was quoted as saying that all a team can really do is get to the playoffs; everything after that is basically luck, with perhaps having a couple of great starting pitchers making a difference. I think that's basically true. (Nephtuli? NoyG? G?) Managing actually plays a small role in the playoffs - when to make moves, whom to start, etc. - and in that aspect, I think Wedge had a clear edge, helped a lot by Torre's terrible decisions, such as starting Wang.
The Indians hit about .500 with RISP in the series. That's astounding, and pretty lucky. The Yankees hit .100. That's unlucky. But the number of chances each team had to hit with RISP (27[!] to 10 with two outs) is a lot of the difference, and that comes back to simple things like walks and OBP. The Indians had a .417 OBP; the Yankees were at .300. The Indians walked 20 times, the Yankees 14. The Indians constantly had runners on base and IN scoring position, helped by 10 doubles; the Yankees didn't (just 3 doubles), and perhaps pitching out of the stretch affected things as well. Certainly the worry about wild pitches was justified after Chamberlin's.
While there's no real "clutch" in baseball, there is "choke". I don't think the Yankees really choked, though Joba might have when the bugs were flying around his head; Carmona had the same problem in the 9th yet never stepped off the mound.
Torre starting Wang was idiotic. "Let's throw out a guy who got shelled against the same team on short rest, even though guys on short rest are 12-30 since 1999 and Mussina is perfectly fine." If he were truly concerned about Mussina, he should have started him but had Wang available to come in as a reliever. I don't get why he wouldn't put (LH) Giambi up against Byrd. Wedge starting Nixon against Clemens was good. The only two players who really didn't play well in the series are two starters who are hard to replace at their positions - 3B Casey Blake and 2B Asdrubal Cabrera - and both play the field well. Wedge using his bullpen properly was great, though putting in Borowski was the only time I was nervous last night. As I discussed with the friends I was watching with last night, having Borowski as the closer who only really pitches in save situations is brilliant from a different standpoint: It means that the Indians' best relievers can be put in when you really need them, such as with runners on or to get past a rough part of the lineup, etc. Betancourt and Perez faced 70 inherited runners this year; just 9 scored. Using them and Jensen Lewis just to place more pressure on the Yankees by having them chew up those 6th-8th innings is great.
I have to admit to rooting against the Indians for one AB - hoping ARod would HR off Perez. It just stuck it more to Yankees fans who whine about ARod not being 'clutch'. I also couldn't help but enjoy the constant camera panning to ARod, as if he were at fault for Jeter grounding into double plays or Posada whiffing. Anyone else notice how ARod seems to be the only player on the Yankees (maybe Matsui, Giambi do it sometimes) who goes back to the dugout and advises his teammates what to look for, who listens to coaches telling him little things before the AB, etc.? Meanwhile, if you watch Indians' games, you see just about the whole team doing it (especially Casey Blake, Victor Martinez, and Hafner)?
There's plenty more, but that's good enough for the post. Whomever is interested is welcome to join in in the comments. :)
Oh - Indians in 7, because I have to. Can CC/Carmona pitch 1-2, 4-5, and both be available in 7? Or at least CC in Game 7?