The reason ultimate healing runes were nerfed and replaced with potions and spells in Update 8.1 on December 11, 2007, was because of the vocation balance. Cipsoft wanted to make sure the vocations were different in the sense that Knights weren't good at magic so they would have to rely on other methods. Also, experience share was implemented in 8.1 so they wanted to promote party hunting with druids.
Here are some quotes from my sources-
"We will also alter the way to restore your hitpoints and mana. Since magic in general is something a knight is not especially gifted at, the current healing spells and runes will hardly be useful to a knight in the future. However, knights will have 3 new health potions to use instead. Additionally, they will learn a new way to instantly clean their wounds. Sorcerers and druids will have 3 new mana potions at their disposal. Paladins have some talent with magic, but are also skilled similarly as knights. Therefore, paladins will use a combination of healing spells and 2 of the 3 health potions as well as 2 of the 3 mana potions. When you get into combat, you will generally be able to use supportive spells like healing at the same time as attack spells." Vocation Balancing Preview
"Furthermore, you will need a good magic level to use healing runes and spells effectively. For this reason we have given knights the ability to clean their wounds instantly and added 3 new health potions for them to use. Sorcerers and druids, on the other hand, will have 3 new mana potions at their disposal. Paladins will be served best if using a combination of healing spells and 2 of the 3 health potions as well as 2 of the 3 mana potions. When you get into combat, you will generally be able to use supportive spells like healing at the same time as attack spells. What is more, knights that have little confidence in their own healing measures might now enjoy hunting together with a druid to heal him just in time. The awesome new feature shared experience will let you benefit equally from your party hunt." Major Game Update 8.1