It didn't come out of nowhere in the middle of the season, it was a known issue at the end of the previous season
NHL might not participate in 2018 Winter Olympics – The Mercury News and it was a known issue before the previous season too
Alex Ovechkin will defy NHL to play in 2018 Winter Olympics
I don't think the NHLPA ever really cared much about the Olympics, and thus apparently made no really effort to negotiate to go; the moment it required something of them they cared even less
The NHLPA seems like an incredibly stupid bunch to me (i.e. how they don't understand what 50% means and how the escalator worked) - it wouldn't surprise me at all if the NHLPA just assumed they'd magically get to go, and didn't really understand any of the issues (just like they didn't understand escrow/etc)
But it sure shows that the NHL players, who make 400-500 percent more than they could make anywhere else in the world, thought getting more money/benefits was more important than Olympic participation
To me the owners and the players are the same, money is the priority (and the Olympics really don't matter much at all to either side)