Limited severance pay is one thing, years of guarantee are another. He doesn't lose anything when an offset applies, he gets all that he originally expected. He just doesn't get to double dip for having failed.
Besides, your severance pay, if of any length, is earned for service time. The first round flop generally flopped from the get-go (unless due to injury, like Courtney Brown), so it is hard to say he "earned" a double dip.