For me it's two fold.
A. the principle of the thing. one year of 400-500k cap space has been shown fairly repeatedly to be worth a 4th-6th round pick. This deal enable 7 years of that. a standalone 6th was a lowball on that front. Second front, a 5th-7th is a pretty standard price to just *talk* to a UFA early. The 8th year for holding rights is that much more valuable. Kyle did Holland a favour by waiving the *talk* price in the hopes of realizing that extra value, Holland refused to pay for it. in a closed business environment there's value in standing your ground. With the stakes so low, why not.
Of course, the counterargument is that it cost the leafs nothing to do the Oil a massive favour and that goodwill could be beneficial down the line, but I don't think it's hard to infer that Holland tried to spin it the pick as "take it or leave it, I'm doing YOU the favour" and that there was a certain amount of screw you in the Leafs decision to decline.
B. (less consequential) Yeah it hurts a rival. Maybe that 5ook takes them out of the running on a player the Leafs like. Maybe they do need that space year after year and bleed picks in retention deals.