I agree that the players should be able to take a paycut (if they want) and stay at the Storm like the Bulldogs did in 2002, but the problem here is the players were being paid so much more that taking a massive paycut for their talents is not something they would want to go through. Imagine Greg Inglis playing for $200,000 a year.
Agree with your logic. The problem with the whole situation and the reason I believe that it will (rightly) head back to court is if Gallop continues on his witch hunt. If Inglis is contracted to Storm next year for $600k and is prepared to stay for $300k but whoever offers $350 and he goes, Gallop is saying that Storm has to cover the original $600k in the 2011 salary cap and pay the difference to Inglis at his new club.
As you say above, the NRL set the precedent in law in 2002. Any other path taken by Gallop is fraught with danger and legal action. He should let nature take its course. Not all players will accept taking a paycut to stay, there will be natural attrition as Tolman and Finch are gone, others are targets.
The only other thing I would say is that Storm should have to get below the cap before the $300k increase for next year is taken up or it can only be used on 1st year players in 2010 being retained for 2011 ie Widdop, Duffie, Stanley.