Well, in actuality it was due to the failure of Michelin to make their tires handle the (known) loads at Indianapolis. It was the same course layout as the previous season. They wanted the FIA to change the track to accomodate their failing to do the engineering they should have done before they showed up to race. The culmination of this fiasco was, instead of just keeping their cars in the garages, the sight of all the Michelin-running teams pulling into the pits after forming up the grid and doing the warm-up lap.

But yes, Toyota was running their tires at too low a pressure, against Michelin's recommendations. It was suggested that some teams/drivers could have ran a competetive race since they did not overload the tires as much, but Indy is not a place to risk the odds. In many peoples opinions Michelin made too many compromises in the durability of their tires in favour of performance, and as a result the whole sport suffered.

juan