I can't answer what "warrants" retaining him. The only opinion that matters on this is Heather Lyke's. And with the financial situation faced by the Athletic Department, he'll get year 4 and 5, unless things are unbelievably bad in year four.
In short, I'd say that Capel's tenure his not met my expectations. I thought we would be contending for an NIT in Year 3, and instead year 3 fell apart.
As for year four, we'll have to see what Capel can pull off for getting some new players in here. And so much depends on whether Justin stays for another year. I completely expect him to not be at Pitt next year, but many other feel differently. We can only wait and see.
If we have Justin next year, a decent season is certainly possible.