Great article here on The Bargnani Problem:
The real kicker is at the end, and is straight, uncomfortable truth (bold is mine):
Colangelo, or whoever is in charge this summer, is going to have to manoeuvre to change much about the identity of the Raptors. Rookies Jonas Valanciunas and Terrence Ross have shown enough this year in limited play to indicate that they could and should improve next year. Valanciunas, in particular, could make the team a lot better as he learns to direct the team’s defence. In addition, another year of the team getting used to playing with Gay and vice versa could make the Raptors better.
But even then, the Raptors’ ceiling appears to be that of a borderline playoff team; that is where the heavy lifting will come into play. The Raptors are going to be over or nearly over the luxury tax, even given the use of the amnesty clause on Linas Kleiza. That means the Raptors will be well over the salary cap, and be left with no ways beyond a trade to dramatically improve the roster.
Accordingly, the Raptors are going to get a good chance to find out what their assets are worth. Valanciunas is likely close to untouchable, but the Raptors have a few other intriguing players, from Ross to Amir Johnson to DeMar DeRozan to Kyle Lowry. Perhaps the Raptors can turn some of those players into more productive ones.
It is just clear that Bargnani no longer falls into that category.