Why the "phantom DL" hasn't been used yet is beyond me.
I think, much like Papelbon, it has to become painfully obvious to those controlling the purse strings that the dude is hopeless. Phantom DL him or DFA him, either way, you still have to pay him and you still have to pay someone to replace him, and if it were my money, I'd say Oh Hells No. You have to have evidence that not only is the dude bad, he's consistently bad, and he's not likely to get better. And then you still have to hope to get the ok to dump him.
Not looking to start a "Lerners are cheap" debate because really we're talking about the better part of $4 million here, and they didn't get to be rich by just dumping big chunks of money like that without being absolutely sure that there was no way to right the ship.