Right now, in my opinion (and in the opinion of others), the only way Kessel and Phaneuf (for example) return anything in terms of notable talent is if they eat dollars off their contracts. Often, a rebuild gets jump started by flipping the older talent into younger prospects. These contracts constrain that from happening as well as it might have.
I agree that they won't get much for Phanuef and Kessel, I think that by moving them out and making a clean break, that will provide the Leafs with talent through them finishing at or near the bottom of the league the next couple of years. The key for the Leafs is that they need to correctly identify the pieces that are going help them going forward, and moving out everything else for whatever they can get. Pieces like JVR, Kadri, Gardiner, Komarov, Holland, Panik, and Reilly need to be evaluated to see if they fit with the plan going forward.
The likely effect is it will lengthen the time it will take the Leafs to recover from this mess. It's depressing. We've stepped into multiple piles of crap and some of it is going to stick to our shoes for some time to come.
I agree that this is a mess because they shouldn't be in this position after 10 years of being a pitiful team.
However, I don't think they are in as bad of shape as they were when they came out of the JFJ years. At least they have drafted in the first round the last couple of years. That always help. I agree that it would help more if they had some 2nd round picks to go along with those, but hey baby steps. They have some guys on the farm that look like they will be legitimate NHL'ers in Finn, Leivo, Brown, Nylander, Percy, Loov, and maybe even guys like Granberg and McKegg.
They need elite level talent that can make a difference in a game, and the only place to get that reliably is at the start of the draft as many have noted and lamented over the last couple of years. Hopefully they can get that talent over the next couple of years. I mean the thing that most Leaf fans should be thankful for is they finally have a plan that doesn't seem to be contingent on them either fleecing someone in a trade or finding a diamond in the rough in the draft in the late rounds.