I feel like you might be overselling Pagan. Yes, he was effective last year, his first year in the majors, the year most everyday releivers are the most effective they'll ever be in their MLB career. Yes, he was able to translate his strikeout stuff from the minors to the majors. Many pitchers can't and he did. He deserves note because of it.
Still, he's a flyball pitcher and his effectiveness over his career will be decided by his HR/9, or, how many of his flyballs die on the track vs. hit the first row. Last year, his HR/9 was 1.25. His HR/FB was 9.5%. Is that sustainable? Maybe. It's a genuine possibility.
Looks to me like Jerry's betting against this outcome and the A's are betting that their Coliseum will mitigate that risk. Both are reasonable positions to take. Let's not pretend that the downside risk isn't present. Pagan is valuable. So is a stoploss suture at a position that the M's have been hemorraging at since Richie Sexson was good.