You can't make that decision in a vacuum. How much does the 3rd year pay? How old is the player, does he project to fall off sharply in performance or maintain? What will the market be like after 2 more seasons?
Sure, getting a 3rd year reduces the risk for the player, but it is completely misleading to compare the TCV of a 3 year deal to that of a 2 year deal and treat the $ difference as if the player were completely unable to have earnings year 3.
You're right, but I've I can't recall ever seeing the final year of a contract tail off significantly, and it's a safe assumption that his value will be higher now than two years from now