I would imagine Everton are wary of becoming embroiled in an arms race. You also have to factor in, if you give it to 1 young player, lots of others start demanding it. This is very much where City, Liverpool and Chelsea are at, who all carry very expensive youth academies. I estimated earlier on this thread I would conservatively guess they spend 50m a year on salaries, fees, agents payments and sign on bonuses for young players a season. That's a conservative estimate too. As a club we may well have decided we won't/can't compete with that.
I would be happy too as well. While Liverpool's talent line is actually quite mediocre for what they pay City/Chelsea's is enviable and structurally I would happily make that commitment if it meant the output they get. However I doubt the board will want to.
I digress slightly, but Small will have been offered a deal here, and likely a much better one elsewhere. I don't see much evidence he is more likely to come through at a Chelsea, or an Arsenal or wherever, but he may well get paid a lot more money. I actually think he'd have had 1st team minutes this summer if he would have stayed, which is more than I can say for Arsenal or Chelsea.