Morgan Rielly, Tyson Barrie, and Jake Muzzin as our top3? Yeah, I think at an absolute minimum that counts as average. Dermott is top4 ready and can play the right side. We have about 7 different options to play the third pairing left side, one of whom will probably not suck, and Ceci can suck quietly as our #3RD. It will be a little weird while Dermott is out with injury to start the year, but we have a legit #1 (Reilly) and two guys who are great in #2/3 roles (Barrie+Muzzin). It's obviously not the Preds or the Wild's defense, but we're going to have six players slotted in roughly where they belong. We upgraded from Hainsey to Barrie, so yeah, I do think our defense is better.
#1 - Rielly
#2 - Barrie
#3 - Muzzin
#4 - Dermott
#5/6 - Ceci and some guy
I really do not know how anyone could look at that list of players and think that's a below average defense core. Maybe you want to quibble that Dermott should still be a #5, Barrie should be a #3, and I'm optimistic about the third pair, but that's STILL an average defensive group.
I'm not going to tell you that we're going to play insane shutdown defense, or that Tyson Barrie is rock solid in his own zone, but I will happily tell you that's the third best defense in the Atlantic right now, behind your Bruins and the Lightning. At an absolute minimum, it's middle of the pack for the NHL and our offense is still above average by your own words.
If the Leafs don't match an offersheet, they'll be able to take on 10m in cap before the end of the summer, with a big 'ol basket of new draft picks to trade from. You're right, finding a replacement would be critical, but it would hardly be the toughest thing the Leafs have accomplished this week.