If the idea is rebuilding around Kidd, then yeah, it doesn't make sense. Definitely agree. However, if the idea is to build around Kevin Martin and (hopefully) a young big you get through the draft, and you view Jason Kidd as at worst a guy to help develop the young players and make people better, and at best a key cog in an improving team, then I think it makes more sense.
Basically I wouldn't sacrifice any of the rebuilding chips to get him -- I wouldn't give up a young player or a draft pick, and I'd still want the mantra to be "play the youngsters" so we can get a good pick. But if you can trade Bibby (if he's not going to opt out) and, say, Kenny for Kidd, you're not sacrificing cap space and anything that it would take to rebuild. You could still trade Artest and/or Miller for expirings, go into the offseason with cap space and a good draft pick. You've just consolidated the burdensome contracts of two guys who definitely don't fit a rebuild into one contract of a guy who does.
I think there's a fine line between wanting to tank, which is well and good, and being opposed to making trades that could leave you much better off down the line. I think this falls into the latter category. I don't think a desire to get Oden or Durant should blind the team to good opportunities that arise along the way.
But I realize that all of this hinges upon the Maloofs and the front office categorizing such a move as a rebuilding step rather than a "win now" type of move, so I can definitely understand why people would be hesitant.