The conventional wisdom in this town is that Jerry Buss dropped the ball, big-time, when he traded Shaq in the off-season and let Phil Jackson retire, rather than letting Kobe Bryant leave as a free agent. While Miami's emergence as the class of the Eastern Conference would seem to support that line of thinking, I think there are some problems with making Dr. Buss the scapegoat for the Lakers' downfall.
First, as anyone who saw last year's NBA Finals can attest, the Lakers were no longer a championship-caliber team before the Lakers made the trade. It was a stone-cold fluke that they even made the Finals (where have you gone, Fisher King?), and the Lakers were one miraculous Kobe Bryant trey from getting swept by the Pistons, one of the least talented champions in my lifetime. Without a draft to build on, some changes were going to be in order if the Lakers were going to do something better than remain competitive.
Second, Shaq was the obvious candidate to be moved. He is seven years older than Kobe, had a contract set to expire in another year, and he had all but disappeared in four of the five games of the NBA Finals. He was rarely in shape, often showing up for training camp morbidly obese, and then playing himself into something resembling "shape" over the course of the regular season, which usually encompassed a few weeks on the D.L. Even if he could be presumed to have two or three more seasons at the top of the league, his was clearly a stock in decline over the long haul. The salary cap meant that extending Shaq's contract and re-signing Kobe would have made it nearly impossible to sign another superstar anytime soon, which, as anyone who saw the 2003-4 NBA Finals can attest, was absolutely essential if the Lakers were going to make another title run.
So, of course, the Lakers trade their star for two younger players, neither of whom will likely start on any future Lakers champions, re-sign Kobe, and Shaq is finally motivated to get into shape before training camp, this time with a new team. The Heat have completely dominated their conference, and if they remain healthy through the playoffs, are almost a lock to make it to their first NBA Finals. The Lakers will not make the playoffs, and are now struggling to remain ahead of their Staples Center cotenants, the Clippers. Neither result could have been considered unexpected at the time the trade was announced (the biggest flop in the NBA this year isn't the Lakers, btw, it's the T-Wolves, the team with the best record in the Western Conference last year, who returned all of their stars, but have a record scarcely better than the Lakers).
But even had the Lakers held on to Shaq, managed to re-sign Kobe, and re-upped the ZenMaster for another year, it is improbable that they would be contending for another NBA title this season. Without the humiliation of being traded, I doubt Shaq would have been healthy enough to contribute the way he has to the Heat, and an injured, sub-par O'Neill would, at best, have led the Lakers to another 4 or 5 seed in the West, good enough to possibly get out of the first round, but not good enough to win the title. To Jerry Buss' credit, the Lakers aren't yet willing to settle for just being a contender.