If he is lost it sucks, but it's not unexpected. We've got a very large portion of what is a young squad on long term deals (which is a great place to be), so there just isn't going to be the money to compete if another side, like the rebels (who have a lot of players off contract) want to splash cash. If he was being lost overseas or to league it would be another story, but in that case there would likely be RA money available to help.
I do want to see someone in the 23 next year who is clearly being setup to take over the 10 jersey from O'Connor, it doesn't need to be some anointed 19/20 year old though, and generally speaking a guy like that is better off playing club for a few years than the occasional 10 minute stint off the bench - just look at what happened to Mason down at the tahs.
That said, I'm not sure this is a great move for him and his development. With To'omua and Deegan both there he's no garauntee of making the 23 next year and if he can't get significant game time it will be hard to progress in Melbourne, the club scene being a step down from what he's currently playing in.