I'd personally say the latter. I think if he had stayed and played in that Wilson side the following season, which very nearly went up, he could have had a good season. Who knows how he might have built on that from there (like Maguire who also came into the first team at the same time).But what point are you making? That we did well to get 1m for him as he never really 'made it' or he destroyed his career by moving and would have been better staying to play games?
Because here is the conundrum if he'd stayed he still almost certainly wouldn't have 'made it' and he also wouldn't have got the money from the big contract Blackburn would have given him.
Very difficult choice, try and progress your career at a lower level by getting games or bank the money that sets you up for life but risk stalling your career by sitting on a bench.
I think the Blackburn move killed that momentum and confidence he was showing.
As you say, it's a difficult choice as there's such fine margins and a bit of luck often involved in these things.