Sherman helped the Seahawks win a Super Bowl title following the 2013 season and led the club back to the championship game the following year.
Then, according to the four-time Pro Bowl selection, it started to go south in the Pacific Northwest.
"Mistakes and poor judgment on things ruined what could have been a really special deal," the 30-year-old Sherman told Sports Illustrated. "You don't have much left right now.
"And to say you're not going to pay Earl Thomas is just ... There's no decline in play there. He's played the game the right way. Who do you have to pay? You have the two best linebackers in the game. You have the quarterback. You have a great wide receiver in Doug [Baldwin]. And you're paying Duane Brown."
The Seahawks finished with a 9-7 mark in 2017 and failed to qualify for the postseason. An intense offseason overhaul began for Seattle as Sherman, defensive end Michael Bennett, tight end Jimmy Graham, defensive tackle Sheldon Richardson and cornerback Jeremy Lane departed the team.
"They've lost their way," Sherman said. "It's as simple as that. They've just lost their way. When you make too many mistakes over a long period of time, you kind of dig yourself a hole. And then when you backtrack, you gotta make a bunch of rash decisions to try and fill the hole and hope that it holds up."
Sherman was a fifth-round pick (No. 154 overall) out of Stanford in 2011. He has 32 interceptions and 99 passes defensed in his career.