Sunk costs should be irrelevant to the discussion. I.e. doesn't matter what round he was drafted in, that's over with. All that matters is what the Sabres think he's worth relative to what they could get in a trade.
Here's a guy who is a different sort of player but a cautionary tale:
http://forecaster.thehockeynews.com/player/10251
Picked 17th overall he was traded at age 22 for a mid-2nd round pick and an exchange of fringe players going each way. If the Sabres are not bullish on Nylander but he can still fetch 1st round value in the trade market, now is absolutely the time to trade him before his value deteriorates. That said, he's still two years younger than Lazar was when he was traded, so perhaps he develops. It's just my personal opinion he is not going to become a contributing NHL player but I am not claiming to know more than the Sabres (or anyone else) on that topic.