First of all, Hillary is not the only one on the Ballot. There are a few others, but it's pretty fair to conclude that she's the only viable candidate on the Democratic side of the Michigan Ballot.
Next, Why? Well, Michigan moved up it's primary date without giving proper warning to the DNC (according to the DNC). In return, the DNC choose to revoke all of its Democratic delegates.
What does that mean? It means that when the Democratic Party holds its national convention there will be no delegate votes cast from the state of Michigan. Technically this is how party nominees are chosen.
It part to show solidarity with the Democratic party and in part because it just didn't matter, several candidates (including Obama and Edwards) chose to remove their names from the Michigan ballot. They didn't need to campaign there. It just didn't matter.
Also, I believe that technically Michiganders can write in candidates. Unfortunately they can only write in candidates that have registered as "write in" candidates previously. Obviously if the candidates went through the trouble of not being on the ballot, they weren't going to register as write ins.
Is it right/democratic/fair? I don't know. But hopefully this can shed some light on the issue for you.