Think of it this way: waiting for awhile longer is smart for both sides.
1) For the Bills, they need to know his play will continue to be high end. His play warrants a "big" contact, putting age/status/history aside for a moment. If he leads them to the playoffs, he deserves it. Now, while they might get him cheaper now, he's worth what he is worth. Therefore, the Bills should match any price he gets from another team.
2) For Kyle Orton, if he continues his top shelf play, he'll get paid either way. From us, or someone else. Now, given that we've established that he's worth what he is worth (market value), and that the Bills would (should) match any offer given to him, then he would likely pick the best team/situation he can find. If he just got to the playoffs with the Bills, I think you'd be hard pressed to find another team that needs a QB and has made the playoffs like the Bills just did. Why would he leave in that case?
So the downside there is that you might get him cheaper if you offer a contact sooner, but I think it's a risk that is justified. Wait and see how it plays out.