No, that's the point. There is no changing of the decision later. That's effectively it. He's gone. Three years down the line, he'll either still be playing well and so extend his Yorkshire contract (and be a long way from SA selection having not played in SA cricket in that period) or he'll somehow have declined and so he won't have a contract anywhere.
He wasn't dropped for the SL series. SA actually played a batsman short to fit him in, a dangerous game as it turned out - Philander's not good enough to bat 7. And there are no guarantees, but that 50k per year will exclude match fees. It would have likely been a lot more than that, plus international cricket is the best place to advertise yourself for the IPL, which could dwarf either of those two figures. And, he played County Cricket last season as an overseas pro. There is no doubt he could have done so again this year given the international season he's just had. That 50k a year is really just a starting point on which he could have built a lot more.
ETA:
This Guardian article about it has annoyed me. It brings up quotas, but I fail to see what quotas have to do with this. The first-three choices in the current attack of Steyn, Philander, Rabada are two-thirds non-white and 100% justified as first choices due to being worldbeaters, all three of them. It's lazy journalism to blame this on the quota system. Similar things were said when Kyle Abbott did a kolpak. It was similarly unjustified then as well.