It could be a bad business move. But it's also probably the only move left for the Kings. I have no idea how aggressively McNair has tried to shop Bagley, but it's clear that Bagley's been dangled in possible trades. Unable to move him, the team is now stuck with a player on the last year of his rookie deal without a clear idea of what he's going to bring to the team in the long-term.
Offering Bagley an extension along the lines of what JJJ received would be financially imprudent, at best. In three years with Marvin, it's been nothing but flashes. He possesses not a single skill that the Kings can hang their hat on and say confidently, "We need this on our team in order to succeed in our quest for eventual playoff success." That's simply not worth a $14 million gamble.
Positioning Bagley to receive a significantly lower qualifying offer may not look great to free agents or draftees, but unless the franchise is prepared to let Bags walk for nothing next offseason, then it's the smartest play from an asset management standpoint. He would certainly have value in future trades at the cost of $7 million, and if he manages to stay healthy and put it all together on the court, he'll position himself for a bigger payday the following year. It's gotta be on Bagley at that point. He can't be a "wait-and-see" player forever.