The striker moved to Spotland for an undisclosed fee on Friday, penning a two-year contract with the Lancashire club.
Knill did not want to lose the forward, who had actually earned praise from some supporters this term for a perceived increase in workrate, but agreed to his transfer request.
He had been criticised in the past for an apparent arrogant attitude, and he had also criticised the Iron while on loan at Accrington last season.
While the entire team have taken a lot of flack after opening the season with four straight League One losses, Grant took the boos aimed at him following last week's 4-0 home defeat at the hands of Yeovil particularly badly.
“Bobby was incredibly distraught at the crowd’s reaction to him. He had also had some abuse through the game. So on Monday he broke down and said that he felt that it didn’t matter what he did, he wouldn’t change people’s opinions of him," said Knill.
"Bobby was adamant that he couldn’t play here. He didn’t feel that he was ever going to be given a chance.
"At that point we all sat down - the player, the management and the board - and decided that it was probably better that he goes.
"I am sorry to see him go. All he was missing was a goal. We tried to tell him that a couple of goals changes peoples opinion, but he was adamant that he couldn’t play."
Knill felt there had been a marked improvement in Grant's attitude and rewards this season.
"When he went on loan (to Accrington) he said some things, but when he came back we spoke with him and explained what he had to do," added Knill
"Whenever he spoke to the press this year he has said the right things. Even on the pitch he was working hard for the team.
"We thought he was getting there but, in the end, it was a lot of responsibility on a young person and the big thing was he wasn’t enjoying playing: especially at home. So in the end we all made a decision which we thought was best for Bobby."