Personally, I think they are looking at his Wood performance and saying he more or less inherited second after No Biz disposed of the other speeds (despite being rank and fighting) and then repulsed AGS's later more serious bid. I don't know how you can come away from that race thinking anything other than No Biz is much better than the Shug horse right now.

If you think AGS ran subpar and was used harder early (which IMO he did/was), you come away from the Wood thinking that Sightseeing is a very promising colt that is moving in the right direction but he didn't really accomplish all that much in that spot by finishing second.

He would be a deserving longshot in the Derby despite finishing relatively close to No Biz in the Wood. (keep in mind I am not raving about No Biz. I'm just comparing those two)

However, if you assume he continues moving in the right direction, later this year he may be hitting his best stride just when some of the horses that competed in the Derby are starting to tale off. Why waste him in the Derby where he is likely to make a run and finish mid pack when they can keep him fresh, develop him, and pick up some good checks along the way waiting for a spot where he has a legit shot at a big dance.