It's true, you also have to play the 75 games to find out if they can do it. It's not that unusual for a good-but-not-great team to lose 2 of 7 on the one hand and win 9 of 10 on the other, or take three from Toronto and lose 3 to DC. It's just a game of musical chairs that's ending early.
In a normal season it could have gone either way right now - if it was June 1 we could easily be looking forward to the return of Realmuto, Hoskins, Arrieta and Howard, as well as a rested Harper (and we may yet anyway). Or we could be hearing about surgeries (and we may yet anyway).
The funny thing is nobody thought this team as constituted was going to win more than 82-84 games, other than fans (and, allegedly, the team itself). If they'd be on a better track in a normal season maybe they would have paid the tax. Hindsight says they were good enough to win the division with a better bullpen, but that doesn't actually help you build a better bullpen, and they've now tried and failed to do it three different ways (top free agents, scrap heap, reasonably good trade aquisitions). As you've noted the only way to avoid the free agent crap shoot, whether at the bottom or the top, is with development.
If I were Middleton, especially if I lacked self-awareness about my own poor choices, I probably would make the financial excuse and say, "if we're only ever going to go .500 anyway why should I have a high payroll"? The 2019 team wasn't that much better than the 2018 team and this team isn't that much better than the 2019 teams; if they stood pat with the core stars they already have and just added all mid-level guys the prognosis for next year wouldn't be that different, and maybe things would break better.
Otherwise, he has to double down, and it seems to me we really do need an OF bat regardless of what we do with C and SS, given the DH and Cutch's limitations. We can't run it back with Kingery and Quinn producing at this level except as bench players.