He did have to make a bunch of adjustments, its one of the main reasons they let Cujo go and kept that worthless Manny Legace around. There were a few players that had to be sold off - he was going to get rid of even more to make room for Fedorov but when Sergei didn't immediately commit to the more than fair offer KH gave him they cut him instead.
As for the unlimited budget thing, thats not 100% true. Mike Illich put a lot of money into the Wings but IIRC only 2 seasons of the MI era were they the highest paid team in the league, 01-04. Even in 01/02 they had 5 players defer money just so the team could sign Brett Hull. Prior to the back to back cup wins the team was not that expensive, but Mr. I was really good about re-investing in a winning team. None of the current Red Wing 'fans' complaining about 'being in a tough spot because no good draft position for many years' were bitching when the team was winning and perennial playoff contender. Remember the 'Dead Things' were garbage until Illich bought them (1983) and Ken Holland was the head scout that helped build them into a contender until he became the GM in 97 and maintained that team and won 4 cups out of 5 finals appearances. Red Wings had a conference finals run in the late 80s and were a contender from 1993-2010 and continued making the playoffs for several years after that. Holland isnt young enough to achieve that same level of success with EDM, but if any GM in this league has a chance at getting the Oiler's dumpster fire under control it's him.
I'll go even further and point out that the Wings may have been a contender a few years earlier if Devellano hadn't been so keen on trading away the young talent Holland was scouting/drafting (Oates, Graves, Murphy, Klima) for one season of Bernie Federko and four years of ~50pt Jimmy Carson. In fact if you look through Devellano's trade history as a GM (
History of hockey trades by general manager Jim Devellano - NHL Trade Tracker) you'll see how bad he was at trades compared to Holland who actually won a few (
History of hockey trades by general manager Ken Holland - NHL Trade Tracker).