Tyler Kepner said pretty much the same thing: "This deal does not preclude Yanks from bringing back Damon, but now they don't have to, and they're negotiating from a stronger position."
If the Yankees do re-sign Damon I would like to see him get at least a third of his starts as the DH. An outfield of Granderson, Melky/Gardner, and Swisher is much better than an OF with Damon in left. I'd also rather have Damon batting second in the Yankees lineup instead of Granderson.