Ideally the Jays would have traded a healthy Donaldson at the July deadline for a decent return. With that not being an option it was essentially trade him at the August deadline for next to nothing or hold onto him and extend him a qualifying offer for roughly $18 million in the off-season. Management didn't want to risk the qualifying offer because they believe he would have taken it.
Why would that have been bad? In part because it would block Vlad Jr.'s path to the majors. The Jays only need someone to plug in at 3B for a few weeks at the start of next season to avoid burning a year off Vlad Jr.'s contract. They have players on the roster currently to fill that short-term void without bringing Josh back.
Another factor is all the large contracts on the books for next season in Martin, Morales and Tulo. We are already seeing the team have to get creative with Martin because Jansen is ready to be the #1 catcher. This log jam in the infield could potentially affect how quickly guys like Bichette and Biggio reach the majors.
I'm grateful for all that Josh Donaldson did for the Jays, but at the end of the day also looking forward to having the 3B position free for Vlad Jr. to step in. It sounds like things unfortunately soured at the end between Josh and the Jays, but that's likely more to do with him being one of AA's guys and Shapiro and Atkins wanting to take the team in another direction by committing to the rebuild.