Here's one thing that Danny got wrong:
He assumed that if they 1) got a player's coach in Doc, and 2) won and had a shot at the title, that FA's would be clamoring to play for the C's at a discount.
I've mentioned before that this assumption hasn't proven true, except for the occasion like Posey (and Daniels hoped to follow) where there is no great deal out there for them, so they sign for a bit less to play for a winner--but only in order to cash in the following year.
This has been the big problem that I suspect Danny missed on: I think he expected it to be easier to pick up an impact bench player or two every year for next to nothing. When he was able to, we won the title (with Posey). If Sheed suddenly turns into the impact bench player we hoped he'd be when he signed, we'll have a very solid chance at winning another.
One other mistake, IMHO, was not making a stronger committment to having and keeping some young players "in development," whether those players were our own draft picks, D-Leaguers on non-guaranteed deals, or guys on minimum deals with cheap team options for future years. I think that's changing, though, with the recent DL signings and the upcoming draft (I expect to buy or trade for another pick).