Terry Ryan's reluctance to give out long term deals to Santana and Hunter was likely a big reason he was pushed out in favor of Bill Smith. The Twins were getting a new stadium and wanted to make sure Mauer and Morneau were still there long term and Ryan clearly couldn't stomach such contracts.
But I'm not sure a long term deal for Santana wouldn't have worked out better for the Twins. Yes, he was out for the 2011 season which may have been unavoidable, but when he returned in 2012, he was back to his dominant self. He was probably the Cy Young front runner after throwing his infamous 134 pitch no-hitter on June 1st. That no hitter was important to the Mets as they had never had one, but Santana never recovered. His shoulder was shot and he limped out a couple of more months before having to shut down his career for good.
I know pitch counts aren't popular, but no way the Twins would have been that irresponsible. Heck, they took him out during his 17 strikeout game when he had a chance to tie the all time record of 20.