Oh, and there is this:
Grunfeld: Arenas will be a Wizard next season - ESPN
I think Ernie is making this decision because he made Gilbert the $111M centerpiece of his reign as GM of the Wizards. He sunk so much money into Caron and Jamison, and now they're gone. If he voided Gil's contract or tried to trade him, how could he defend the fact that he deserves to keep his job?
Also, it's worth noting that unless he makes statements like these, Gil's trade value goes to zero.