2. The Jazz would have only been good enough to (frustratingly) make the playoffs at best
While making the playoffs isn't a bad start to a promising era, it can be annoying if that's as far as it goes. Jazz fans are already annoyed by the fact that the team hasn't fully embraced the rebuild to the point that they're not getting high lottery picks.
If Holiday had been traded to Utah, it may have been worse. Holiday would have made them better but added a couple more wins to their total, making them mediocre enough to make the play-in potentially and, by extension, the playoffs, and nothing more.
The Jazz may have extra draft picks as an ace in the hole, but they would also force themselves out of contention for good high-end talent in the NBA Draft with the picks they had if they did that. Watching a perennial loser isn't fun, but there's always a light at the end of the tunnel. With Holiday, there may not have been a light, which could have led to a long-term setback.