It seems to me, albeit a relative newcomer to SPL, that the problem with sellbacks is not that they exist in the first place, but that they're not punishing enough. I come to this as someone who's played in a few team tournaments before but never managed, so keep that in mind. As a player, it is demoralizing to have someone on your team who's going to go 0-9, or a teamslot that you can never expect to win. I understand that people want to punish managers for making poor managerial decisions, and I know that not every team can win. However forcing everyone who is drafted by a manager to be shafted for the entire season feels a little bit excessive, if an equitable sellback system can be created.
The problem that has been indicated with sellbacks and mids is that it is too advantageous sometimes to draft players at mids and that that's kind of silly. I agree that the current structure makes it too easy to pick people up at mids. I propose a few changes that, I believe, would make buying someone/selling someone back an absolute last resort and make mids accessible, but punishing.
1) You can only sign up at mids if you signed up for the original draft.
This one seems somewhat self-explanatory: everyone should have access to the same pool of people, and I think that it shouldn't be advantageous to save money to hope that someone really good signs up at mids so you can pick them for cheap. If players like BKC can join after being tourbanned at the start, or managers can drop out of managing, sign up and go undefeated, it is too advantageous to save money just in case you get someone nutty at mids. This seems bad for the tournament to me, but I'd be willing to entertain arguments on it.
2) Reduce the sellback value of players.
Currently, afaik, the sellback value is full value? In the team tournaments I played in, which had full sellbacks at mids, the players could be sold back for half value, which meant that 2 min value playes = any player at mids. I would propose 1/3 value, rounded down to the nearest .5k, which makes sellbacks really inefficient. To pick an example amusingly indicated above, Cased would go for 5.5k in a sellback, which brings me to my third point
3) increase the baseline cost of purchasing a player at mids
Make it 4 or 5 k. 3k is really cheap for a player at mids, considering how little one has to save at draft, or trade people for. Make it so if you want a new player, you have to really commit sellbacks, or really have a decent chunk of money saved up.
If a manager makes a risky pick that doesn't pan out in this model, the season isn't automatically over. However, they might have to decimate their team to fix it. If they set themselves up to be able to do that though, I'm ok with it.
Tl;dr the problem with sellbacks/midseason pickups are letting random people sign up and that it's too cheap. Let sellbacks happen if they're appropriately expensive, and if buying players at mids is appropriately expensive.