You're close. Exposing Webber would have us dealing with what the Broncos are dealing with Jay Cutler right now. Except Webber meant more to us than Cutler will ever mean to to Denver. You'd have a fanbase screaming that the office cares more about financials than fans and winning, and a superstar that could care less about the team. Exposing him would have been just as bad, since I doubt they would have spun the "An expansion team wouldn't have taken a chance on an aging, just coming off career altering surgery big man that has a monster contract to boot" PR story.
To be honest with you, the Bobcats wouldn't have come near Webb with a ten foot pole. Not that he wasn't still good (in relative terms), but he's coming off microfracture surgery, he's still due to make $50 million plus on the remainder of his contract, and your team has a $30 million salary cap. I don't think there's any chance that they touch Webber. They had already declared that they weren't going to be looking at any high-priced players.
And, as a preemptive strike, you sit the guy down and tell him that you're leaving him exposed in the expansion draft because you have no reason to believe that he'll be selected by the expansion team because of his salary, but you don't want to lose Gerald Wallace. Hurt ego aside, I think Webb would have been okay with that if it was done right.
Problem is that I don't think the Kings were really high on Wallace at the time. He didn't fit Petrie's idea of a swingman (read: couldn't shoot), had built up a good amount of tension between himself and Rick Adelman, and the plan at that time was to press on with the 25ppg Peja Stojakovic starting at the three-spot. I don't think they expected him to become the player that he is now.