His performance keep dropping since the last season, this season even worse.
It's hard to expect his performance will back in the next season, but the problem is Manchester City currently don't have a deserved player who can replace De Bruyne. Extend his contract for one more year doesn't sound bad.
Manchester CIty can use one year to find better player, whether it's Marmoush or sign a new top attacking midfielder.
Players like KDB are not given an extended contract only because of their performance but for experience and past contribution to the club. His recurring injuries might be another reason why Manchester City might want to let him go. It could also be that he wants to leave to gain experience from another league..
I understand what you're saying but players like KDB earn an awful amount of money and oftentimes they are not willing to reduce their salary so what is the club supposed to do? Still paying him 20 mln euro per season for his past contributions? That would make sense with a 3-4 mln contract, which is already a ton of money.