I think Brick is more or less on target with this team going into a decline if nothing occurs. KG and PP have shown they've aged quicker than anticipated and the team's recent production shows this issue.
If Ray is kept for the season and Danny makes only minor tweaks to the team by swapping minor bench players with another team, this team will fall out of contention quickly after this year. (There's an outside chance they could win this year but the longer they continue to play like garbage the longer those odds get.)
Consider this, Ray is kept and no young talent is brought in that can make a difference going forward. This summer, Danny's looking at a volume of openings to fill due to all the expiring deals: Starting SG and back up everything except PF where he's still got Sheed and BBD under contract next year. Is backup PF secured? Not really. Sheed's been a no-show this year and BBD is too short to finish around the rim. Even starting PF is a question mark with KG's health.
Now, Danny only has the following options to fill out the roster: Resign his FA's, the MLE and Vet min contracts. Keeping that in mind, resigning Ray isn't a bad idea if he takes a major pay cut. Ideally, he'd be paid and playing a 6th man role. Unfortunately, the C's don't have a young player ready to move into the starting role nor are they likely to get one better than Ray with the MLE. Ray's back to starting and a year older.
Figure Daniels or TA will be resigned. If Daniels wants a significant increase, is he really worth bringing back? He can't seem to stay healthy. What do you do if he wants more money to the point the MLE has to be tapped into? How about TA? He's not worth more than what he's currently paid but after 6 years of promise, do we bring him back again in consideration of his performance this year?
House: does anyone really want him back? he's not a backup PG and his shot isn't falling. Surely Danny can do better with a vet min player, or can he?
Shelden: for a vet min guy, he's been surprisingly productive but would you pay him more to keep him? Can another vet min take his place, probably but probably not as young or athletic and with less production.
Scal and Giddens: Adios and farewell. vet min fillers here.
If the team spends the MLE, do they break it up into multiple, limited-skill players such as a House-TA-type of split or do they shoot the wad and go for a higher-impact player such as a Sheed-level player knowing they have many spots to fill?
I think no matter how this situation were to play out this offseason, the team won't be improving and the big 3 get a year older and decline further. C's won't have a chance to improve until KG and Sheed's last year where Danny may be able to parlay their expiring deals (and possibly Ray's if he's resigned and smartly to only 2 more years to coincide with KG's deal) into young talent and/or draft picks for contending teams looking for that last piece to put them over the top.