In the purest sense of competition, yeah, Phil should do the Olympia. He didn't make HUGE improvements with the 9 months off. He'll probably be a little bigger by NEXT year's Arnold or whatever, but it'll still be him against a top Vic, Cormier, Dex, and Freeman, and he'll still be struggling to finish top 3. He's a great bodybuilder, but he doesn't have their size.
In the sense of making money, yes, Phil's doing the right thing, absolutely. He did everything he could to create value for his name, and signed a good contract. Taking 2nd at a small show, or 9th at the Olympia, would devalue that. Right now, there is still mystique. He should be guest posing nonstop and doing expos and anything else he can get his hands on. The judging climate (preference to size) means he can't be top 3 at the O as long as Jay's still playing, so why not do the smart thing and just lay low and get paid?