Old age, running with low freon and no oil, bad luck. Basically the lubrication failed, and since the compressor is mostly aluminum, the galls and locks up.
Some rebuilt compressors are dirty from the factory, and trash very quickly.
Leaks can do you in too -- 134a in the presence of water and heat decomposes into hydrofluoric aicd!
The clutch can also go bad, as in your case, since with the climate control on economy the compressor should be off, but doesn't release.
Ten years old, lots of miles, not too much of a shock. Big pain, though.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!