I'd keep him, because:
1) He's a reasonable COF if his price stays down
2) He'll ask for a typical arb-1 salary next season-- but the season after that, when he doesn't play at all, he should just ask for the same salary he made in his arb-1 season.
3) So you'll get him for his arb-2 year at a manageable price, when he will presumably be able to play (how many days do you see him on the DL for? What I see is not reliable since I'm not in that world). At that point he'll have a playable price-value relationship, and you can play him or trade him as you see fit.