Honestly, I agree.
At the time we let Palmer go (and I didn't even rate him as much as others here like twosips did, I was wrong) and before we got Doku in (who I did not know enough about), I repeatedly said I'd rather see the club properly trust Palmer to be a Mahrez replacement, than sign any player to fill a space. But properly commit to going the season with him.
It is hard to say though what came first, as he had been making noises about wanting to leave all summer, and maybe that pushed the club to sign Doku, rather than the other way round. And Palmer also came to prominence in a different position, in a team built around him. Good for him.
Not every player will be a mistake like that. If McAtee doesn't push to leave, the club won't force him. If he sticks around this season, next summer there will be a lot more change when he can meaningfully decide what his chances are.