See, if the Astros truly believe Bagwell is disabled and can't play, why don't they just cut him? Because if they do, some team will wait until he clears waivers and then will pick him up for the league minimum and take a chance on him either being a pinch hitter or a DH. Thus killing the Astros claim he is medically disabled.
The Astros bought an asset that they really can't ever use. That in order to use it they have to go through tons of red tape, hurt feelings, bad publicity and attorney's fees that are going to cut into the payout.
Drayton (possibly) made a bad business decision in the Bagwell contract. Drayton (definitely) made a bad business decision in the insurance.
This won't end well. Then again, nothing ever does or it wouldn't end.
Drayton, suck it up, chalk up the loss to lessons learned, and move on.