Yeah, we know that now. But while he was in his purple patch earlier on, would you have said at that point we would have been better off selling him to bring in a L2 quality replacement just so we don't lose 'value'?
Scenario 1 doesn't allow us to get a Sykes replacement in, really. We get a kid with potential who might be Championship quality if given a year or two to develop, or a L1 cast off from someone else who is proven not to be at their level.
Scenario 2 happens if Sykes continued being poor enough to not have interest from anyone else. Some were saying at the start of this season that maybe we shouldn't keep the likes of him or Agyei on if they don't develop any end product. He did find some output this season, which meant that he can run down his contract and look for better options.
It's all part of the gamble, same when we couldn't offer a contract to Nelson due to his terrible injury, and then he gets back to form in time to get a free transfer to the Championship.
Look at some of the clubs in the PL that routinely lose big players for free at the end of their contract. Pogba at Man U, Lacazette at Arsenal, Rudiger at Chelsea (slightly sanction enforced, but they would have needed a huge wage increase to keep him anyway). You can have all the resources in the world, but have to be prepared for player power and some losses for every transfer 'win'.