I think we saw the the ceiling for Hill, at least in the Spurs program. He was never going to become a Parker/Ginobili-caliber guard. He had flashes of greatness (like the Dallas series), but that's exactly what they were: flashes. Other than that, he was a mid-level talent who was overrated on defense, and couldn't consistently perform at a high level.
He may be able to put up bigger stats in a system where he is highlighted as a main weapon and playing bigger minutes, but as long as he is behind Tim/Tony/Manu, he was never going to be a star for the Spurs.