Good post, but 2 points I quibble with:
Myth #1: Big Baby has more upside. Why? because he was drafted more recently? because he's a significantly inferior player so far? Both were first round talents with questions: injuries for Powe vs. conditioning for Big Baby. #Powe was much more highly regarded coming out of high school than Big Baby, and, when healthy, he put up better college numbers, and has outperformed Davis as a pro as well.
Myth #2: Why, in your description, is "poor outside shot" a negative for Powe, but "improving outside shot" is a positive for Big Baby? Both were not good at shooting last year, but Powe was actually better than Davis at jumpers. powe also shoots better from free throws, which hints that his shooting form is better and he has more potential to hit jumpers consistently.
I think the upside argument in favor of Davis is based on his (hopefully) losing weight. The assumption is that with 20-30 lbs less he becomes much mobile and more athletic than Leon Powe, especially with the injury history that Leon has had.
As for shooting a jumper, I dont see much from either. Neither gets off the floor well enough to be a decent short range jump shooter IMO. They will be blocked by guards. I agree that Leon Powe currently has a far superior stroke at the free throw line. 
Let me clear a few things up, because I think there is some confusion as to what my point was:
1. I would keep Powe over Davis. That may have been unclear due to the thread title, sorry.
2. As for the poor outside shot vs. improving outside shot, I based that distinction off of the fact that Baby shot a good many more jumpers than Leon did last season. He used the 15-18 footer as part of his repitoire (albeit not very effectively), while Leon only shot anything outside of the paint when there were two seconds on the shot clock. That is no slight to Leon, though, because I approve of that. His game is low post. Still, when that is all put to the side, I'd still like to point out that having a higher FT % may signify a purer stroke, but not necessarily an ability to shoot jumpers. Anyone who has played basketball at a high school or higher level can tell you that shooting over a defender, or with someone running at you is much different from taking an uncontested FT. baby showed some ability to shoot the ball under pressure, while Leon did not. That is the basis of my argument.
3. I would say one of the key points I cite to tilt the balance in favor of POWE is that Davis has a risky weight condition. His weight could potentially spiral out of control, ruining his career. After all, he does have an eating problem that affects his stamina and athleticism.
That is all, thank you for reading.
/Era out