You let him walk away when the contract demands for what he provides exceeds the value you've placed on him. The 4 years invested are a sunk cost, he is what he showed he was: an average QB. The money he's being paid is what you pay someone who can win you games, not just play in them.
I trust in Elway to make the best long term decision for the team. This front office saw him in practice and games every day for four years, if they don't want to pay him franchise money then I'm sure they have their reasons.
Edit: and dammit I liked Danny. That's a shame.
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