I dispute your suggestion that a club cannot compete in this league without busting the cap. Perth, Wollongong, NZ - have a look at where they are on the ladder. None are top dog, but none of those teams are relying on beating the bottom half of the ladder to accrue their wins.
Before the season, I didn't rate Perth at all, but they are playing well as a team, defending well, and getting it done - they can win on the road (5 wins so far) and they are solid at home (6-1).
Now back to Adelaide - knowing full well that the club were heading into a sale situation and all the off-season trouble, they allowed their free agents to walk - not just one of their forwards, but three. They let them become free agents and receive offers from rival clubs. Not just an incremental change to go from first-round-exit to contenders, a frontcourt clean out leaving Nash and Cooper.
It's easier and cheaper to keep someone where they are than relocate someone new, but that's the path they took. I can't speak for Dusty and Jake, but in Oscar's circumstances, the gap between what they offered and what would've had him sign was not very much at all, but they didn't go for it.
So, you know they elected to let Dusty go (or try their luck with a low offer) and they didn't exactly pursue the other two with crunch-time offers - from that, I think you can say that the club/coaches at the time thought that, despite the sale situation, they could do just fine.
Horvath for Dusty - fine.
Copes for Oscar - aside from the youth/ownership thing, not a bad trade. Dare say Copes is playing for cheaper than Oscar asked anyway.
Majstro and Wheeler for Holmes and Rees (can't compare then 1-for-1 given salary issues as well), but on paper, not a horrible swap by any stretch.
At the beginning of the year, no one was writing this roster off. There were jokes about age and so on, but Boti liked the look and many fans agreed. Smyth and Breheny were comparing Majstro to Cattalini and saying he'd surprise people. Boti said Farley was looking in top shape, leaner than ever. The coaches headed abroad and brought back Horvath, confident that he'd added an outside shot.
Now that they're 5-12, you can't cite off-season club issues or purse-strings IMO. You can cite injury (though Bullets haven't had luck with Bradtke; Kings have been without imports, lost Smith and Worthington for patches, just lost Barlow for the season), but you can't shift the blame around to suit the scenario.
The problems are there even when the team is at full strength.
Someone (who'll stay nameless) summed it up really well saying to me something like: "They weren't far off the pace, but I've just come to realise that they're just not very good."
You don't know what you're going to get: (1) Everyone firing and the squad overrunning the opposition, or coming back for an awesome road finish? (2) Or is it going to be passionless, lacking defense, destroyed-on-the-road, humbled-at-home stuff?