3. Holiday would have provided less clarity on their long-term direction
Going off the fact that Holiday would have risen the Jazz's ceiling only slightly, that would have led to additional problems of whether or not the Jazz planned to go young or build a team designed to win now.
Wanting to have your cake and eat it in the NBA all depends on how successful the team is currently and how swimmingly the rebuild is going. Danny Ainge got away with that in Boston, where he formed an entertaining team that also had the luxury of assembling talented youngsters.
However, when the Celtics were torn limb from limb in the 2017 Eastern Conference Finals, he knew that those teams had reached their ceilings and that playtime was over. Though not entirely their fault, the Jazz do not have a surefire playoff team that the Celtics did all those years ago. Holiday would have made that so, but then there'd be an even less clearer picture of what the Jazz want to do.
For what it's worth, adding Holiday would not have been the worst idea, but it may have done more harm than good for the Jazz if they pulled the trigger on that deal.