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Keep in mind that the AI doesn't have any idea who particular players are - they are just looking at a bundle of stats. Now I will admit the trading is far from perfect at times - personally this is one of the reasons I always play fictional leagues, I don't have the emotional connection to particular players that you obviously can in real life if they are from your favorite team or you just like the player.
Personally I usually try to avoid totally ripping off the AI when it occasionally makes really off-the wall trade offers. Sometimes there is a reason for them, like they may be in really bad budgetary shape and trying to lighten their player salary load - but it's certainly hard to see taking on Lonnie Smith for a young Palmeiro.
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