Salary-wise, the Cs could have sent Bill Walker + Gabe Pruitt + $1.5M cash to GSW for Belinelli.
After not picking up Pruitt's option, GSW would have ended up with an even smaller contract (Walker's) on its payroll than George's, plus a player with more upside than George, if they chose to keep Walker around next year (but it is team option, so either way, better contract than George's).
So why wouldn't the Cs do such a deal? Perhaps financial reasons (it would cost the Cs about $3M to do the deal -- the $1.5M sent to GSW plus the loss of savings from not picking up Pruitt's contract(2*$0.8M, bc of luxury tax)); perhaps because they don't really like Belinelli; perhaps the Cs think Walker has more upside.