I don't think it was a lost opportunity because chances are McGrady would have pouted and left anyway, like he did in Toronto. The Celtics as a franchise was in a prolonged down stretch and they needed talent that was willing to stick around. I don't remember the exact rules, but it wasn't like it is now where most drafted stars will at least stay into the second deal because you give up too much money otherwise. That means today you can draft a 19 year-old and feel pretty confident you'll have then under control at least 6-7 years into their career. Obviously Pitino being horrible was also a thing, but I'm saying separate from that it made sense to be wary of taking McGrady.
Yeah, it was guys like McGrady that led to the rule changes in the rookie scale contracts from 3yrs to 4yr length contracts. Previously, it left teams in a difficult bind with the high schoolers because they typically sucked for the first year or two and were only starting to break out in their 3rd and final season. Just like McGrady did with Toronto. That 3rd year when he went from a 15mpg guy to a 6th man of the year candidate in the first half of the season to a starter & future All-Star caliber player in the 2nd half of the season. So they only real had half a season of high level play with McGrady before his contract came up and that made it difficult to deal with the money.
I don't remember if they had restricted free agency back then either. They may not have. I don't remember Toronto having a choice to match the contract offer or not. I don't think they had restricted free agency. So that might be another rule change that came in afterwards.
Then there was all types of shenanigans going on in the background with Toronto and McGrady. The coach (Butch Carter) was linking his extension to McGrady's and saying McGrady would only sign if he was the coach otherwise McGrady would walk away. Trying to leverage the organization. Muddied the waters and confused the whole situation.
Plus, T-Mac wanted to go home to Florida. He wanted warm weather not cold winters. Although he did consider Chicago but I believe Orlando was always his first choice. And he wanted to be the man instead of the #2 to Vince. T-Mac likely would've been the #2 to Pierce here in Boston at that same stage in McGrady's development. Heck, probably the #3 behind Pierce and Toine. So both the weather and the basketball situation would've made it highly likely that McGrady would've bolted for Orlando anyways even if Boston did select him instead of Mercer.