Osweiller was an upgrade over Manning.
Manning was only in the post-season as a courtesy. If Osweiller had been playing against the Steelers, as much as I hate to say it, the game would have been much uglier. Those 9 drops or whatever were largely due to the ugly ducks that Manning was floating out there. The Bronco receivers HAD been catching balls thrown with some semblance of velocity and accuracy before that.
Nope. It serves them right. Denver pretty much slapped Osweiller in the face for keeping Denver in contention while Manning had an epic failure of a season and completely blew. It's true that the defense was the real story for Denver this year, but hands down Osweiller outplayed Manning this year. In return they benched him and then attempted to lowball him when Manning finally decided to retire.
The Broncos absolutely got what they deserved. Whether or not Osweiller does well elsewhere is unimportant. What matters is that Denver has to scrabble for a QB and they'll have to overpay for a stopgap because they didn't do their business properly when they had the chance. Treat people with respect and generally they'll respect you back.