The King felt himself tainted by his association with Mussolini (although it had been the King who had eventually ordered the Duce’s arrest). By stepping down, King Victor Emmanuel hoped that he could preserve the future of the monarchy.
It was not to be. After the war ended, Prince Umberto did become king (Umberto II), but his reign lasted barely one month. The Italian people no longer wanted a king (or a Duce). A referendum was held and the people voted to turn Italy into a republic.