As has been said, franchising him (even for the next two years after this one) is something the Seahawks COULD do, but I can't imagine they'd be short-sighted enough to actually to do that.
Earl has been incredibly vocal this year, and even his teammates on the Seahawks (e.g. Wagner) have come out to support him. Back in 13 the Seahawks were the team that all the FAs wanted to go to. If they franchise him after this year it's sending a message to every player in the league that Seattle isn't a place they want to go.
So, that means one of two things:
(1) The Seahawks give him the long-term deal he wants sometime this season before FA. It doesn't seem like they're planning on doing that, though, as if they were planning on that, they could have avoided this entire thing and just done it now w/out the bad blood that likely will make keeping him more expensive when he's got FA on the doorstep.
(2) They've decided they'd rather have Earl for one more year than a 2nd round pick. Unless they think they're winning the Super Bowl this year, I don't really get that. You can make the argument that they'll get a 3rd or 4th round comp pick for him two years from now, but you have to deduct that 1 round per year as it projects out into the future.
So the question is would you rather have a second round pick, or Earl Thomas for one year and a pick at the end of the fourth or fifth round?
As you're reloading your team I really don't understand preferring the latter.