You have to wonder what was the first time this happened. Not just for Wizards but for TSR as well. The company that owns D&D has a special prominence in our hobby. It turns out the answer is not the infamous 1990's TSR Internet policy. BUt involves a wargame company called SPI.
Greg Costikyan is a noted game designer (Toon, Paranoia, the Creature that eat Sheboygan, the 1st Star War) who wrote a essay on wargames and the SPI situations in SPI Died for our sins.
The recap of what happens is that SPI got caught in a cash crisis because of the early 80s recession, got a loan from TRS to meet payroll, TSR calls the loan in the minimum time, then manages to become the creditor with first dibs on SPI. Decides to seize the assets instead of the company.
To say this went over well with the rest of the industry is an understatement. Understand that while in crisis the peak of wargames was only several years in the past. There were a LOT of people who had and loved SPI games. Also SPI had a reputation for being a maverick, a maverick that made things better for the average wargamer by breaking Avalon Hill's grip on the market.
This even managed to work it way into USENET. Because of the small number involved it doesn't the reflect the sheer hatred this move caused but what there is still telling.
Date: Mon Jun 28 01:20:43 1982
Local: Mon, Jun 28 1982 1:20 am
Subject: gencon rumor
I haven't anything specific about gencon, but I heard that dealers
are mad at Gygax, and perhaps will flop. Gygax has apparnetly made
himself unwelcome and sponsors are reacting by not showing up.
Date: Mon Jun 28 04:49:45 1982
Local: Mon, Jun 28 1982 4:49 am
According to what I've heard the people who are pissed off at TSR and will be boycotting Gencon are not the dealers so much as the manufacturers. This is due to the problems caused by TSR buying out SPI and the date chosen by TSR for holding Gencon East. The countries game design companies are all members in a guild type organization and each has one vote for the location of Origins. When TSR bought SPI it thought it should have two votes not one. Needless to say the other companies disagreed and bad blood had resulted. The other problem and I am not sure if they are related is the Gencon East is close to Origins like one weekend or two before and same general location. Since Origins is the big con for the guild they are naturally peeved about the way TSR is acting. Personally I don't blame them since as you can see from SPI's folding that their's is a marginal business and the one thing the industry doesn't need is this kind of crap which is likely to drag all the companies down. Most of this information came from the last time I went down to see GDW and talked to Rich Banner who is currently guild president.
I found this from a 1995 post it has some personal accounts of people's reaction.