UPDATE: Thanks to an inexplicably detailed website on Michigan high school football, which lists the results of every game going back to 1950, I think I figured out why Northwestern and Powers stopped playing each other. It wasn't the violence referenced in the comment section; there were violent altercations at almost every game. It may have been the results. Powers beat Northwestern six times in a row between 1978-1983. With the old playoff system, losing the first game to a smaller school was probably a good way to ruin your season. But things might be different this year. Northwestern beat Southwestern 32-6 in the first game of the season on Friday.
UPDATE: Rich Frost points out that this rivalry is renewed just as the biggest rivalry of them all in Flint — the fabled Northern/Central matchup — disappears.