We stink because we don't have guards who are starting caliber. If the free agent happens to be a guard that can do what we need, it will change the end result of many games. It won't change the team from being a competitive team (what we are now) to a contender like Golden State or San Antonio or Cleveland. However we can move into the playoffs.
The one unknown in all of this is how truly good Porzingis can be. No one really can know. Is he going to be a good 2nd option? A 1st option? What he is now (A very good 3rd option)?. I don't know for sure. If Porzingis fills out his potential, the way the Knicks will play and what they can do transforms significantly just by that.
I do agree that the unknown and likelihood of KP needing a few years is what makes trading Melo the right move for the team. It'll change the core, give them some young players. Possibly give them a lottery pick in 2017. It'll set them up for a very good core in 2017 forward (assuming the Melo trade is one where we can get back 1 young starter and 1 draft pick at the very least).