They are limited to having 3 players on 2-way contracts, so I doubt that they would be acquiring more young players and need a spot for them, because if they're trading someone (including Dame) and get 2-way contracted players in return, fuck the G-league team  and the bluff it plays at.
I'm sure 90% of it is that they didn't want to send their own talent down (Sharpe not withstanding) and have them be coached by someone in their system, and also could be easier to sign and keep talent that could be brought up (and take advantage of Schmidts talent).
The NBA should run the G-league like it's AAA baseball, in that the players on the team are under contract with the parent team, and can be traded, etc. And in fact, they should have a G-league draft too. That way, teams can stash players potentially and not have it take up a roster spot on the "parent" team.