I'd argue that if the Spurs had Elson and not KT, they'd be in a real predicament at this point. At least KT offers the hope that he can be a rugged interior defender and rebounder.
You benefit from hindsight. But at the time that the deadline loomed last year, the Spurs need for a rebounding big man was evident and this board, among other things, was screaming for a move like the Thomas trade. Presti was smart to demand the 1st Rounder, but I think in the moment, it was a deal that was reasonable to the Spurs for a variety of reasons -- particularly in light of the understandable supposition that Splitter was coming and that Mahinmi would be ready to go for 2008-09.
I think the chronology would have made that difficult if not impossible. Elson signed with the Bucks on August 14. The Spurs knew by then that Splitter was staying put in Spain, but had no idea that Ian would be injured about a month later and then again when he took the assignment to Austin. Again, hindsight is a great thing, but in making their roster decisions, the Spurs couldn't have guessed that Mahinmi would be so badly hurt (or such a slow healer) and I'm not sure that Elson would have been considered a reasonable signing for the Spurs in mid-August.
I'd agree that Elson would be a better choice than almost any D-League big man (as I have argued in another thread) but I'm not sure that Elson was a reasonable choice in mid-August when that decision had to be made. With that said, if the Spurs are truly looking for a role-playing big guy with NBA chops, someone like Elson or even Rasho wouldn't make a bad option to pursue, IMO.