I'm feel like I should argue about this topic in two prospective:
Business prospective: From a business prospective, I feel like the Knicks would be absolutely stupid to not match Houston's offers. Knicks make so much money off Lin that it's ridiculous and we all know how money makes the world go wrong. Anyways, the NBA is a business and business only cares about making maximum profit. They make money off the ticket sales at MSG. With people going to the MSG to watch a Knicks game, people will buy food and drinks from concession stands. There is also the Lin jersey and merchandises that are sold not only in North America but all over the world (especially in China and all over eastern Asia). That's millions of dollars in sales and profit.
Fans prospective: Here is where everyone comes in. Many fans have very mixed feelings about the large contract that Lin will get next year especially since he's only showed a couple weeks of brilliance. For me, I think that Knicks need to match Houston's offer. They don't have a strong enough PG for the future and Lin is the only good enough point guard on the Knicks for the future. I do however agree that he doesn't deserve that much money since he hasn't proven that much yet, but he's still young and he can still continue to grow as a point guard especially with the help of Jason Kidd. Also for some weird reason, I kinda want to watch the Rockets fail at getting Lin when they let go of both Dragic and Lowry. So thoughts?