I understand your frustration, but let's remember a couple of things:
1) The incentives for being an active gameday participant (not that hard for Waters to achieve) could have brought it up to an actual raise in pay from last year. There are still somewhat limited reports, but I wouldn't be surprised at all if his incentives would have netted him a 20-25% or so pay raise.
Not close, because he EARNED $1.75M in incentives on top of his salary last season.
2) No one wanted him last year when he was cut from the KC squad early in camp, yet the team reached out and gave him a very reasonable deal
And he gave them their money's worth and then some.
3) From what I understand, he and his agent even went as far to want something more than the 1 yr/vet minimum deal that the team likely used as a starting point, where they agreed to make it a 2 yr deal worth more. Like many other players who had a good year, now it isn't good enough.
Seems like it was really the other way around... He was fine with the existing deal and they for some reason wanted to adjust it to the tune of minus half a million.
With 10 million in cap space, one would have to believe that they aren't putting much of a priority on this, or they would have bumped his salary up another million dollars or so. Another thing to keep in mind is that we don't know for sure what Waters is asking for.