It may make less sense to the Rockies, unless they can sign him long term, as they'd be taking on a guy who is closer to free agency than a guy like Leake.
This is true. My guess is that if the Reds know Bailey will sign if someone shows him the money, they will tell that to a team who's seriously thinking of acquiring him (and extending him).
Ultimately, the Reds have to decide between Latos and Bailey on an extension. I don't think they can get them both done (and have money left for a possible extension for Chapman). My guess is that the choice will be Latos.