Because in the past I've been held responsible as the bearer of bad news. And I don't want to jeopardize my friendship with the co-founders.
You now have an option to (1) do what's right for you, and (2) potentially have some friends at the end of it. BTW it's not guaranteed that you can have either of these, let alone both.
If you are convinced that you want to leave, I think the best way to phrase it is "I no longer believe that the direction we're headed is the right one. You deserve a co-founder who is all in and believes in the mission. Even though I know this will be painful for everyone, the best path for the rest of you is if I leave now." Expect to give up most or all of your equity position, and maybe stay working a little longer than you'd like to get things wrapped up and in a good place to hand off. Also expect that this won't work and everyone will still be mad at you, but you'll learn a lot and your conscience will be clear. Maybe someday your friends will stop being upset and will realize that you were right, and you can be friends again. No guarantees though.
Best of luck to you.
The actual potential market size may not matter. It is never a great idea to build a business from the top down. Instead, build from the bottom up by seeing if you can sell your product to whoever you think is the customer. The true test is right there. If you cannot get all of the stakeholders to the table due to needed partnerships, it provides another precautionary red flag.
This would likely be moderately illegal if done at a stage that the equity is demonstrably worth something (e.g. Eduardo Saverin's FB situation) but I don't think it would be much of an civil/legal issue before the startup had any demonstrable financial value. I could be wrong. And people will diverge widely on how they see the moral/ethical implications of this.
After spending a year building the product I would hate to walk away.