I pretty much agree with this. First off, a lot can happen between now and then, so it's really too soon to know who will be the best option.
For many reasons, I don't think there's any way that Papi doesn't retire after this season.
Despite Hanley playing much better defense than I expected, I think he makes the most sense at DH for next year. I don't foresee the Sox paying either Bautista or Encarnacion the kind of money that they're looking for, especially at their age.
I read the other day that Hanley's splits as DH are excellent, with the usual small sample size caveat. The year he is slashing .500/.526/.944/1.471 in 19 PAs as a DH, and for his career he's slashing .345/.389/.638/1.027 in 126 PAs as a DH. Can't beat that!