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1.  Yes there is an argument that Morales could stabilize at hitting levels similar to his career averages.
2.  Yes his value occurs 100% while he is standing in the batter's box.  Nobody has ever ignored that fact.  It's kind of like you busted us for not realizing that Brendan Ryan's value occurs with the mitt, or Charlie Furbush's occurs on the mound.  Is there somebody who doesn't know that Morales plays DH and can't run?
3.  For sure, the Mariners should try to find better all-around baseball players.  If they can spend Morales' $14M on somebody better, they should.  In fact, I'll be disappointed if they can't find somebody better.
These aren't technicalities.  In the 30,000-foot view we are basically agreed:  it would be nice to see the Mariners do better than a pure DH who isn't David Ortiz by a long shot.