Throwing in the towel has a negative connotation, but the truth is that not every fight can be won. There's no team with unlimited resources, and there comes a point when the near-term gains of staying in the race or even making a win-now acquisition is a far worse idea than simply living to fight another day.
When the Tigers traded Yoenis Cespedes away, they were only 3½ games behind the second wild-card spot. Does anyone really think the organization would be better off staying in a nine-team wild-card race back then rather than having Michael Fulmer in the rotation now? If last year's Yankees had decided to fight for a wild card, Clint Frazier and Gleyber Torres likely would be in different organizations right now.