There are two ways to look at this:
1) Wilson has returned from the "turmoil" of last year (injuries/mary jane bust) with renewed focus and determination; that he's proving to MD&Walsh that he wants to maximiaze his talents, not underachive.... That Chandler is ready to become a legit #3 type star on a contedning team.
With Gallo and Randolph looking like they're still a LONG way away, the Knicks have decided that Wilson is a keeper. He's versatile, can play SG-SF-PF, can score and defend, and has a shot to be an elite role player to a star like Amar'e.
2) Wilson will bemore valuable as a trade asset if this commodity is more than a 1 year rental. Sign WC to a reasonable extension, and now any suitor will pay more for a piece they can control for 3-4 years, as opposed to watching him walk at season's end.