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This is true, then what do you do with him? Certainly not give him 16+per season? It will be rough to replace his production, but he's not signing a cap friendly deal when he's a free agent. He's going to want to test the market. So that leaves tagging him. No way I pay him market value on a long term contract, that would be idiotic.
Why not give him that? That would put him around the 10th highest paid edge defender in the league. The cost for good players at that position only goes up and the salary cap will continue to rise. You don't know that he will want to test the market. Maybe he'll want to sign that deal to stay in Pittsburgh.
I'm not as concern with his past performance because the coaches really didn't do a good job developing him. It was known that he was raw coming out of Kentucky and you figure that it would take at least two years for him to learn the position. Add in that Joey Porter was his coach and you figure he probably didn't gain much in terms of learning about how to play the position from him. Then the Steelers kept dropping Bud into coverage, so naturally his pass rushing numbers would be down. They switched him back to his natural side last year and this year they're letting him get after the quarterback.
It's actually kind of stupid to say you won't pay a guy his market value and that's exactly what the Steelers do. In fact, sometimes people think they pay guys above market value (Pouncey, Heyward, Tuitt, etc.) at the time of the signing and after two years it looks like they have good deals.