I think there are several things affecting Holiday's performance on the Celtics this season. First, I think it is harder to integrate a new player into a core rotation role than most fans seems to recognize. Look at Derrick White his first season. He came at the deadline, so that is even harder than coming in in the offseason, but Holiday was kind of at the end of the off season. Second is role, he is accepting a role where he is not featured as much so his offensive stats are going to decline some. Plus he is playing next to White who is pretty much the same player in terms of role. And the third is age related decline. I think this is the least of the 3 at this point, but it is a factor. He is 33. Decline is expected and will continue.
I get why they extended him. I don't think this will every be a "bad" contract. One less year maybe would have been better, more team friendly, but a little more or less money would not have made all that much difference. I predict that if White is extended, that one of White, Brown, or Holiday will get traded for one or more players that are more like Horford, a PF/C type. It could be a 1 for 1 trade or a 1 for 2 or more trade (although probably not more than 2).
I have always felt that a good play off team needs at least 3 good bigs. MIL for example has Giannis, Lopez, and Portis. BOS right now has only Porzingis and Horford. There are always exceptions but that 3rd big on BOS has been an issue. And it is going to be an even bigger issue as Horford gets closer to retirement.