As a player, I had a problem with it to a certain extent. If the player is a good student, works hard day in/day out, then it is tough to cut them loose..but with that said, I understand the methodology behind it.
It's a gray area, because whether someone likes it or not, college sports are a business, but the foundation (student-athletes) is not. If Capel is going to have a serious chat with Hardrick, Willis or anyone about transfering, it needs to be before they get into their uppergraduate course work, so most likely between the Soph. and Junior seasons.
That's why Allen needs to stay, you don't cut someone loose when they are less than a year from their degree (assuming he is)...that's just poor ethics. If the coach goes through the process with diligence and care, is honest with his player and helps him find a new school (which happens a lot more than most realize) than I am ok with it. The player has to be honest with himself as well when it comes to their abilities and where they fit into the program.
Capel has made some mistakes in recruiting, winning is part of the game at this level. You don't just tear through the locker room and give someone "their walking papers", sit down and develop a plan which is best for your player, whether that be with OU or somewhere else. It's no different than successfully managing your employee's career.