Is it fair to criticize this? How often would you expect a GM/FO to correctly gauge the market?
This might be as much as the FO establishing a reputation of not playing games, sticking to their guns and making decisive moves based on their internal evaluations.
They offered EE a very good contract and gave him an ultimatum. He decided to play games and lost. If they stick to their guns then the next guy might think twice about calling their bluff.