Which musician retired too soon?

Kevin Gilbert - but it was due to death by sexual asphixiation rather than a voluntary retirement.

I have to agree with Sogood51 about David & David. I have the album and the CD, and the CD is one of my references I take when auditioning any new piece of equipment.

I also just bought Cat Stevens' "Tea for the Tillerman" and "Catch Bull at Four" remasters last week.

Grace Slick comes to my mind. Her voice, lyrics and capacity to rock, or sing a ballad made her one of the few greats of the 60's-70's. Of course Cat Stevens, but he has released new music. It's just not the same genre of his famous past.
By the way, I always enjoyed Eric Burden. Has anyone heard his last release and want to comment on it?

Could you imgine what Frank Zappa would be doing today?

These are not individuals, but for rock 'n roll bands I'd nominate Buffalo Springfield (and, of course, that group Paul McCartney was in during the 60's : )