LOL I missed this.
He could have alleviated the effects of the drought greatly by sharing his considerable stores, but instead he dumped them into the maw.
In other words, if he shared, we might still have Ursoc 
I think it is either a combination of the two. (No new souls coming in and Denathrius draining what remains) or Denathrius actually had a hand in what happened to the Arbiter.