O'Neal also said Howard's situation is not like his was when he left for the Lakers in 1996, because he said he wanted to stay with the Magic but had a better option.
That's no longer possible, because the collective bargaining agreement allows the home team to offer the largest contract. So O'Neal believes there may be an "underlying problem" that makes Howard reluctant to sign a contract extension there.
"I think they have to be a little bit worried that he hasn't committed to signing, so there may be an underlying problem of what's really going on," O'Neal said.
"I don't know if he doesn't like the organization, I don't know if he wants to go to a bigger city where he can get more endorsement deals, he can do movies. No one really knows the problem."
Howard has told the Magic he wants to be traded, and the team has given his agent permission to discuss deals with the Nets, Lakers and Dallas Mavericks.
The Magic have to decide by March 15, this season's trade deadline, if they will trade Howard or risk losing him for nothing when he can become a free agent in July.
"I'm sure they would probably like to move him so they don't lose him," O'Neal said.
But O'Neal, speaking on a Turner Sports conference call, said the Feb. 26 All-Star Game in Orlando still will be a great event even with Howard's desire to be traded looming over the weekend.
Plus, there's always a chance Howard changes his mind and decides to stay. O'Neal noted that Orlando has become a better city with a better building since it hosted the All-Star Game in 1992, shortly before drafting him.
"You know hopefully he stays, because that arena there is one of the best arenas in the country," O'Neal said. "If he leaves, it'll be a travesty."
O'Neal's departure, and the damage it did to the franchise, is often cited as the reason the Magic may have no choice but to trade Howard. But TNT analyst Steve Kerr, the former Phoenix general manager, said his preference would be to not deal the All-Star center.
"I would be inclined towards playing it out and trying to keep Dwight, because it's so hard to get equal value, and given that Dwight seems to say something new every week, I think there's still a chance that they could re-sign him," Kerr said. "I think you have to exhaust every opportunity or every possibility before you make a trade that you might later regret."