The issue isn't about what Tomas Holmstrom has done in the past. That is without question. He's long been an excellent player in a role - involving grit screening shots and taking shots from opposing defensemen in front of the net - the Red Wings have been otherwise largely lacking down through the years.
But it's difficult to imagine why the Red Wings would want to bring him back next season. He is going to be 40 when the playoffs start. He played only 11 minutes per game last year, even less during the playoffs. He has never been a brilliant skater, but it was particularly noticeable how he struggled to keep pace last year. On the good side, he was second on the team in power play goals with 10, but he was minus 9, his second straight minus season. Holmstrom had one even-strength goal all season, and wasn't, frankly, the answer for the Red Wings' power play, which was surprisingly awful last season.
Holmstrom wants to play again, but he is more willing than able at this stage of his career. If you're take sentiment out of the equation (which, granted is difficult given all Holmstrom has been as a player and person) and are honest about it, the wise move by the Red Wings would be to quietly talk Holmstrom into retirement.