This is the crux. Matthew gambled - not unreasonably - and lost. If he had a bank balance he could absorb the loss. He doesn't, so he has to go "scorched earth".
The question from Matthew am others is: how to accumulate that bank balance in the first place. The wealthy teams got most of their money under previous sims, and have had winning teams that could augment their revenues through significant endorsements and playoff runs. Teams without that luxury are hard pressed to break even, and therein lies the crux.
I think we need to figure out, as a league, how much money it is reasonable to expect a team to spend and break even without missing the playoffs.
Pitt has a payroll of $52M. Without making the playoffs, I have no problem with him losing money. The problem is the amount, about $9M.
That means a team needs to spend only $43M (or less) to break even if they miss the playoffs. The problem is, the NHL has a cap floor higher than that, and our salaries are tied to theirs.
Personally, I think that if we have a cap of $59M, then a team around $49M, $10M less, should break even without making the playoffs. Obviously this will change next year.
If teams $10M under the cap are losing significant money, I think we will very quickly get to a place where 4-5 teams go for it in any given year, and the rest have no choice but to field a team as cheap as possible.