He tried but couldn't break through, even after signing one-way contracts. He signed with the Islanders but then they traded him before the season when they traded for Boychuk and Leddy, and Chicago was at their apex so he had no chance, eventually got moved to Toronto.
When he signed his first contract (probably has it earlier in this thread), that he would've retired if he didn't sign with the Flyers. While he's a one-dimensional player, he's excellent at that one dimension -- at that level. He clearly did not want to keep moving around, and if he's not going to be an NHL player, he'd rather just stay close to home. He's good enough that he's worth top AHL dollar, so it wasn't worth chasing money around the world. To keep get another 2-way contract though, the Flyers definitely want to make sure they will be able to use him if they need to. I'd be surprised if Hextall didn't find a way to get him in a game eventually. If he was on an AHL deal, he certainly would've played in the Olympics.
I'm fine if he wants to stay in the organization as long as he wants to play. In the minors, those guys can serve a bigger purpose when you get into things off the ice promotions, functions, and appearances. And on the ice you have a guy you know you can rely on when the musical chairs start moving. His game probably won't deteriorate, he should be a top-line AHL player for a number of years still. Bottom line is that you have a reliable minor league veteran who will do a little of little things that will let other players do a lot of other things to push them forward. We joke about how much that basically means you suck in the NHL, but in the AHL it's a really big deal.
