It will backfire IMHO because you don't go replacing Torre. They lowballed him based on trying to give him an incentive package. He's not a rookie manager and shouldn't be treated as such.
The really interesting thing is, how does this affect the negotiations with Rivera, Posada, and Rodriguez? Rivera has already talked about how resigning Torre or not doing so would affect his decision on whether or not to return to the Yankees.
My guess is all three of those guys really wanted to stay with the Yankees all allong and were just hoping that their posturing might help Torre...but that they'll re-sign.
Well since they have proof he knowingly took steroids , it may mean he's going to jail and it definitely means he's not in the hall. Good riddance. Others may have taken them, but no one else was as arrogant about it as Bonds.