Apparently she wanted to leave after her buddy Al Corley left at the end of Season 2. She later said that the writing for Fallon became blah and victimy, and that the show had metamorphosed from a witty satire about the rich and famous into a lame celebration of the rich and famous. Plus, the Shapiros were majorly pissed when she turned down their planned hotelier spin-off... Supposedly, the spotlight was getting too intense as well, but I suspect she saw the writing on the outhouse wall and wanted out -- so it wasn't (as Joan asserted, trying to sound funny and quotable) the opposite of a rat deserting a sinking ship but instead the deserting of a ship which had foundered and would be indeed sinking at any moment.
Also, she had reportedly contracted hepatitis. The tabloids said Spelling offered her a million dollar bonus to stay. They again asked her back for THE COLBYS (she obviously refused) and I wished they'd asked her back for Season 9 and they almost did (although Samms did her best work there, and got her best material as well).
I don't think Martin feels she made a mistake.
So really, the first major mistake was letting Al Corley go - or rather, mishandling Steven's character was, since that led to Corley's leaving. So let's see...
-If Steven was handled in a much more respectful and well thought out manner, then Al would have stayed...
-If they never adopted the whole "celebration of the rich/famous" theme...
-If they never held a grudge for her not wanting to do the hotel spinoff...
-If they had kept to the original plans for Fallon in season 3 in giving her meatier stuff to do and kept the character tough...
Then PSM most likely would have stayed. She might have toughed it out through the spotlight, taking comfort in working with a whole bunch of people she loved being with and playing a character she loved playing.