I think the biggest thing we're assuming here is Schmidt's health. That's the real wildcard in this situation. I've heard he's been better lately, but there seemed to be some serious concerns about this guy's elbow as early as a couple weeks ago.
It would certainly be a high risk/high reward type of trade, and when you're looking at possible damaged goods, one that Theo might be averse to pulling the trigger with. OTOH, Schmidt's contract has a club option in 2006 ($10M club option, $3M buyout), so acquiring Schmidt wouldn't
necessarily indicate a long term commitment, though it would certainly seem like a step in the direction...
The other thing regarding Schmidt is if we see him as the type of guy to anchor our rotation 3-4 years into the future. I'm sure that Bill James, et al are performing their projections as to what Schmidt might produce in the next couple of years, and how much that is worth financially to the team.
Remember, we have fairly solid prospects making their way through the system these days. If a few of Papelbon, Lester, Sanchez (or others) can be dependable pitchers in 3-4 years, that would save tremendous resources otherwise dedicated towards expensive SP like Schmidt or other established FA starters in their 30's.
We would then be able to allocate these resources towards the best FA to come out.
We know that the FA pitching class this off-season is fairly weak (Burnett and...??), but how about into the future? Santana and Sheets seem to be locked up. I think more and more smaller market teams are locking up and will continue to lock up their young stud arms before they hit arbitration and even reach FA before they're past 30 years old.
This would certainly be an interesting deal. If Theo does pull it, I'm confident that he's calculated that Schmidt is worth the risk. I think prospects are such crapshoots that if you get the chance to acquire a Schmidt for a package of W. Miller + Shoppach + top minor league prospect not named Pedroia, Ramirez, Lester, Sanchez, you do it, especially with Schmidt not being tied down long term.
*Edit* One thing I didn't even think of is that we're dealing with Brian Sabean here. This guy just got bent over a chair by Jim Hendry in the Hawkins/Williams trade. It's not out of the realm of possibiltiy that Theo "sells him some fine real estate in the country".