Starpula has it pegged.

Expiring contracts are the only thing the Knicks have to offer any team. Next year we have Tim Thomas and Penny, as well as Moochie if he is not bought out to trade and they will return us a big time player. Tim and Penny both make $13-$15mil/season.

If the Knicks wanted to try what Denver has done, they trade every good player they have for no ones with small, expiring contracts. I myself as a huge knicks fan am not content to sit and watch them trade Kurt Thomas, Marbury for losers, watch the team struggle for 3 or 4 years to get 18 wins/season, just to try to rebuild down the road.
Dolan is making money on the Knicks I believe. Thats why he will spend unlimited cash for players to make the team better. Although if the Knicks go through 3-4 years of getting blown out every night, The garden would be empty, nobody would buy the shirts etc.
Bottom line is this is the only way the Knicks can improve the team in the present.
I believe the deal for Crawford will go down. I believe Crawfords camp is just getting a few concerns in his contract worked out. I dont think he rejected the deal for good, just in the way it was written, and they will amend it and make it work.