to me, retaining KO is more questionable than retaining Sully. With Sully, you knew you were getting rebounding, decent passing and finishing around the basket. with KO, he can look terrific one game and then non-existent the next.
personally, I wouldn't offer much of an extension pre-season and would prefer to see what he brings this season. if he finally plays focussed every game, he's still and RFA next offseason and C's can resign him.
KO fits this team much better then Sully... He is a big man who can stretch the floor, shoot the three, & run transition... While his rebounding skills are rather weak thats not really what he is paid to do...
he only fits the team when he's having an 'on' game. when he's having an 'off' game, he's not providing anything. Sully may not be the shooter KO is when he's on, but every game Sully was rebounding at a minimum. when KO's not shooting well or being aggressive on offense, what's he bringing -- not much
Even when Olynyk is having an "off game" he provides floor spacing. That is the driving factor behind his high on court offensive rating.
He also started to play quality positional off ball defense last year. When he is on the court, his positioning on both offense and defense aid the team even if it doesn't always show up in the standard box score.
Plus he moves the ball very well. He makes the defense collapse and kicks out. Maybe an assist doesn't come out of it, but a basket comes from the ball swinging after the collapse. He is really almost always doing good things out there on offense and can hold his own on defense.
Like you say, even if he's not scoring, when a big has to guard him to the 3 pt line there are good things happening. Doubters should just pay attention to it when they see him play next if they do not believe it.