It all depends on the team's budget going forward. If the front office is looking at $70-90M budgets for the next few years, the team might as well trade him for prospects. There is no point in having half the team's budget tied up in Halladay and Wells. On the other hand, if the team is willing to move into the $100-120M+ range, keeping him would make a lot more sense.

On balance, I'm in favour of a trade, but this is premised on JP's ability to maximize the return for Doc (and having enough demand from prospect-rich teams to make a trade worthwhile), which I'm skeptical about. Part of the problem is that JP isn't really dealing from a position of strength. Other teams know the Jays pretty much have to trade him, for financial reasons, and that now is the ideal time to get a deal done. Plus, JP has an uneven record when it comes to trades, and during his tenure hasn't shown an ability to identify and acquire top prospects on other teams. And teams seem less willing to part with their top prospects these days.

I wrote about this a couple of years ago...

While I love Halladay to death and he is hands down one of the best Jays ever to don the uniform...

You have to trade him for prospects.  This team is going no where fast and ownership isn't showing the commitment it needs to win.

Trading for MLB ready players would be nothing short of a disaster.  Worst move they could make.

The only other option is that I would try my hardest to resign him.  See if he wants to be a Jay for life.  However, the allure of playoff baseball is strong for one such as Halladay and I don't see those chances as being very high that he would consider signing with such poor ownership/general management.

Here is my preferred course of action:

A) Fire JP Immediately

B) Re-Assess the Doc situation in the offseason under new management.  

C) Regardless of whether we retain Doc or trade him: Petition MLB for changes to its divisional and/or playoff structure. 

With Beeston at the helm and his connections in the MLB front offices this might present the franchise's best opportunity to make something happen on this front.  

One option I like as it might sit well with traditionalists:

Remove all divisions and return purely to AL and NL balanced schedules;

Top x teams from each league make the playoffs;

Even if MLB sticks with 4 teams per league in the playoffs the Jays would have a far better chance of getting in and you can't argue with the fairness of such a structure.

Except that MLB likes having multiple divisions.  Perhaps a shift to a 4 division format, with the Jays in a new one that does not have the Yankees/Red Sox would be ideal.  Need to expand by two teams to make it work though (32 team MLB) and I doubt that is coming anytime soon. 

The multiple divisions allows teams to say 'we came in 2nd' rather than 'we came in 8th'.  Much easier to sell.

Or in D.C., "We came in 14th!"