I think Baby deserves MLE money, and he will get MLE money (or the equivalent in the new CBA). If you can sign a player of his quality (and who has proven he works in the system) for fair money, you do it. It´s not a problem to pay a player what he´s worth, it´s just a problem if you overpay, imo.
Besides, it would be pretty stupid to develop him and not reap any benefits, either through his play or in a trade (and I don´t think we´d get fair value in a S&T). Over the last 4 years, only Rondo and Baby improved their value on this team, everyone else either stagnated or declined. Letting him go without even trying to re-sign him doesn´t strike me as a smart business move, short-term or long-term.
If we still contend we´ll need his qualities and reliability. If we don´t, we´ll have at least a valuable asset on our books, whose value could even rise with a starting role.
So, neglecting any possibility that the Celtics FO has a "rebuild in one off-season" plan we´re not aware of, I think we should and will re-sign him to a fair deal.