User blog comment:Xilinoc/Ch. 541 - THE BLADE AND ME 2/@comment-7924893-20130612200535/@comment-8669536-20130615094807

The original crime might have been simply creating the Quincy. The Soul Society may have understood the threat they posed and that they could be very dangerous if they became too many. The Gotei 13 might have tried to kill Yhwach and end the threat 1000 years ago. He was sealed and the Shinigami thought they had stopped the threat although there still were some Quincies alive, but the Quincies that survived continued to evolve and increase in numbers. And approximately 200 years ago the threat was so great that the Soul Society had to do something.

As for the seal, he didn't lose just his powers, he lost his heart and intellect too.