It was during the home stretch of the regular season. He basically said Legace needed to believe in himself more and realize the opportunity in front of him or it would slip away.
I don't recall the Yzerman call out, but it wouldn't surprise me. The corroborating evidence for me was odd stuff that came out of Legace himself down the stretch. I don't remember the exact words, but I recall some interviews where beat writers were congratulating him or asking Legace his thoughts on Babcock naming him the starter for the playoffs during the stretch, and his reactions were something along the lines of "Nah, I'm not that good" or his big proclamation that he didn't deserve to come back if he didn't win them the Cup. It was almost as if Legace himself knew he couldn't handle the pressure and tried to soften the eventual blow.
In my mind, if Legace was evaluated more properly throughout the year, Osgoods workload would've been much higher, and the fluke/nagging injuries wouldnt have been an issue. At the time I saw Yzermans comment as corroborating evidence, but that's just my interpretation.
Osgood had plenty of opportunity and workload that year... The starting job was pretty much his to lose after being signed, and then he started the year hurt which allowed Legace to get hot. Legace dealt with injuries from early November to early January and Osgood was .891 during that stretch. At one point Osgood allowed 12 goals in two straight starts, which prompted Babcock to go with Jimmy Howard. Legace then came back and continued to be solid until the Olympic break. When Legace struggled a bit after the season resumed, he and Osgood platooned the rest of the year, which gave Osgood some workload prior to re-injuring his groin in the playoffs. While platooning, Osgood was a little better than earlier in the year, but Legace was still clearly better.
I think the Red Wings did fairly well in seeing where Legace fit that year. Despite his stellar season going into the Spring, the Red Wings rightfully didn't want to give Legace starter money when negotiations came up and it paid off when they could simply let him walk after his meltdown. Had they extended him somewhere between their reported $2.5M offer and his $4M ask and he still melts down, they're faced with keeping him as an overpaid backup, letting Osgood walk to sign Hasek or Belfour, and don't have the space to bring in a dman to fill the void left by Fischer (Markov).
Crazy to me that we still suffered through 2 years of phoned in Hasek after that, which squandered 07 and almost 08.
I can see where that makes sense for 2008, since Hasek started to get long in the tooth and dealt with some injuries, but that's an odd take for 2007.
The Wings were squeezed for cap space and needed a starting goalie and a dman, and had to try to make lemonade out of lemons. Hasek was one of the best goalies in the league in 2006 and likely wins the Sens a Cup if he doesn't go down for the year at the Olympics. He was relatively cheap when you consider that Martin Gerber, who had lost the starting job in Carolina to Cam Ward, got almost $4M AAV on a three year deal. He was also the best option available on a thin market. Your other choices were Ed Belfour coming off back surgery following a forgettable year in Toronto, or trading for a recently displaced starter like Cloutier or Denis. That is unless they wanted to really gamble on a combo of Osgood and somebody like Patrick Lalime, Johan Hedberg or Mike Dunham...
Hasek was arguably better in the 2007 playoffs than he was in 2002. He slipped a bit against the Ducks, but he was also playing behind a blueline with no Schneider or Kronwall, a trio of Brett Lebda/Andreas Lilja and a near crypt keeper Chelios taking turns playing 20+ minutes a night as overmatched top 4 dmen, Kyle Quincey dressing just to basically occupy space on the bench, and Andreas Lilja possibly getting possessed by Steve Rucchin using a Ouija board hoping to set up one last goal for Teemu Selanne before they both potentially hang them up.
And Osgood was basically a non factor most of that season. Started out OK, then misses a month and a half with a hand injury and struggles to get it going before he misses another 3/4 weeks with an illness and another hand injury.
Given the Wings cap situation, goaltending issues were going to be inevitable coming out of the lockout. I think it ended up working out OK though, especially when you consider they dodged a bullet missing out on Khabibulin and didn't have to further gut the team to make room for his salary...