This is not about Pamelee. Parmelee could be a placeholder for whomever of Vargas/Sano/Harrison end up at 1B when the Twins are competitive again. Signing a 33 year old even to a 2 year extension (yes, folks, Morneau is past his prime) is nuts for a team that a. does not plan to complete before 2015 ish b. has a clear succession order for 1B (and OF) that includes star-quality prospects and c. has more needs than a would be aging DH (pitching, pitching, pitching).
Re-signing or extending Morneau would be akin to the re-singings of Pavano and Capps and the signing of Correia. Not. A. Good. Move. TR avoided that trap with Hunter, hope he still does with Morneau.
The only part of this I agree with is that re-signing Morneau is not about Parmelee. I don't think re-signing Morneau is at all similiar to Hunter. The Twins could and did replace Hunter's offensive and defensive production, much more cheaply. I don't think that is possible with Morneau, even if he doesn't quite rebound to his MVP self. He isn't that old, he can be very productive for at least several more years(if he is healthy), and it is far too early to speculate on what his contract will be. I don't think that all the young prospects will be ready to replace the offensive production of both Morneau and Willingham for at least a few years. I would much rather keep Morneau around rather than Willingham.
So, if Morneau proves himself healthy and productive, I would like to see the Twins re-sign him, though not for more than 3 years. His contract would have to pretty outlandish to actually prevent the Twins from adding necessary help. That is assuming that most of the hot young prospects turn into productive major leaguers. If they don't, the Twins won't be able to afford enough to sign enough free agents to be competitive, anyway.