I don't think there is much question about Jason Schmidt's option. If the market were flush with pitchers, just maybe you hold your breath and let him go. Not now. No freaking way.
It's easier to stomach a $10M pitcher performing like a $5M pitcher -- which is just about how you could describe Schmidt's year -- than a $7M pitcher performing like a $380K pitcher, which is what the Yankees are currently swimming in. The Schmidt of the past couple of months isn't really worth the price of the option, unless you compare it to the dreck the Giants would be forced to give the savings to.