The team needs an upgrade to compete for a premiership. The spine is where the most meaningful upgrades can occur, and he happens to be the most dispensible from both a contract and playing perspective.
If this team had 2022 Nicho and late 2024 Tricky consistently in the halves, Kennedy would be a perfect re-signing. But we don't. Tricky is still a work in progress, but the Nicho ship has sailed, and we are attached to it.
The fact that he's well and truly outperforming his contract is almost irrelevant to me. Unless he can find an elite level, he's probably the one who has to go unless something major happens in the player market to allow a different change.
Alternatively, we keep running it back and look back in 5-10 years on this era and what could have been.