I'm not sure why you keep bringing up the Ortiz arbitration situation. It was a win-win situation. If he declined, they could take the picks, get younger, and rotate into the DH spot to keep players healthy. If he accepted, they got Ortiz on a one year deal. Papi is coming off a .300 average, 30 HR, .400 OBP season. I'm not going to lose sleep over giving him 14 million a year. He deserved it.
As far as Bailey, please use some accurate information. He's going to probably make 4/6/8 the next three years. Those values are only guaranteed for the year he's pitching, and substantially lower inspite of the injury threat. If he gets hurt, they dump him. If Papelbon gets hurt, the Phillies are stuck with him. He's also been just as good than Papelbon has been over the last three years.