Actually, the biggest problem was not with his throat (since he could hit the high notes well into the 2000s in the studio), but with his lungs. He had emphysema (or so it seems) which was probably brought on by lupus. His decreased lung capacity allowed him to sing if he wasn't doing heavy physical work (which is why I'll Be There always sounded good, because he did very little physical movement during that number).
This condition started sometime after the Bad Tour and is evident even on the first day of the Dangerous Tour. His condition progressively worsened, and was not helped by his drug abuse during the 1993 leg in the wake of the allegations. It's also rumored that it was exacerbated by a use of anesthetics (Propofol is commonly referred to, but I doubt it) as a sleeping aid during the HIStory Tour.
However, it appears that his condition had gone into remission sometime during the mid-to-late 2000s. He got skinnier, most likely due to the discontinuation of lupus medication (which is usually a steroid) and This Is It clearly shows that his voice was in great form. It's a shame that his autoimmune disease had to rob him of the perfect performance he always desired. I'm sure that if he had the choice, he would've sang live for every concert he ever did.
