It's a shame because I do believe he is a pretty good DM, if he's not tasked with doing anything but hold. After Cabaye left he looked hopeless in midfield.
I don't think we're in any position to be losing players, but if we manage to flog him on for a decent price (God knows what that would be at this point), I'd be okay letting him walk.
I think he believed his own hype after his first season here. Failed to really build on his initial success and was found out. He was regularly giving away posession in dangerous areas 3 or 4 times a match, but still guaranteed a start when fit under Pardew.