On other hand, the real NHL does allow this as well and they still have a decent free agency pool year-to-year.
I've been puzzling over this comment since you wrote it Drew. The NHL doesn't allow for trading after the trade deadline until the off-season after contracts roll over. So what are we talking about here? Allowing trades of UFA's during the 2nd Extension period? That doesn't mirror the NHL at all.
If you want to get something for a UFA you need to either sign him to a contract or deal that asset before the trade deadline. What is wrong with this?