Nill is another example of someone that left the organization to manage another team. Same as with Yzerman, I don't believe he would have shown the same aggressive style if he had taken over for Holland, and Holland stayed within the organization (like he likely would have / will). I think it's a lot easier to take over a team when you've had no previous personal connection with any of the management / players. It's a little more difficult to trade, waive, buyout, players that you've helped draft and develop, and helped your predecessor build. Maybe we would be in a better position right now if Nill had taken over for Holland, but I don't think he would have made as many drastic changes as some would like to believe.
As for the bolded. No we don't need to "clean house", and it would never happen. We need a GM that isn't afraid to make trades, and will make the appropriate changes to get this team back on the right path to contention. Make some "difficult decisions", and trade a bad contract, and trade for a top defender.
Who's more likely to make those changes (eg trade Ericsson)? Someone that has helped draft / develop, and / or been around on a daily basis, knows his family, etc.? Or someone that has never met the guy, and knows him only as the overpaid, bottom pair defenseman that was drafted last overall 15 years ago?