It's a bad move in the future because in three to four years it's likely that his value is still higher than whatever the return that is being offered now becomes.
I don't really understand how you can say this. He'll be 33 with four years remaining on his deal. It's unlikely he drastically improves. It's very possible and likely he stays the same or even regresses further. OEL is a depreciating asset at this point.
It's risk the Coyotes don't need to be bothering with. Know when to fold em. Now is the time.
Don't give him away, but now is the time to move on for a multitude of reasons.