It would be a cool situation to buy the Hornets and to build around Rondo. You'd have 2 solid first round picks this year since you'd be in the top part of the lottery and you got the Clippers pick. Strong draft according to anyone who follows that stuff. Jeff Green probably would've been signed to a reasonable deal since his market seems to be nonexistent.
And then that trade today would've left them with that Knicks pick which is likely to be in the 20s. A bunch of nice players that have no wow factor and no chances to be an all star. And they're all old so you basically have to flip them ASAP to be able to get better contracts, youth, and picks(which you should've been able to do with the Paul trade.) That waiting period would hurt. The players are good enough that you'd be an average to solid team, but with no real hopes of winning a playoff series. That damage would've set the franchise back 10 years. When you have the money to get a toy like this, you want to be able to actually have flexibility. This deal would've given them very little.
I can see why the league stepped in. Demps had contact with the league this whole time, but they didn't know the final one that got agreed to in principle.