I agree, there is still potential there and I also agree that it just may not happen here. However I think there are also two more questions to ask:
Even if they develop a bit more, do they fit? If these guys were superstars I wouldn't care about fit, but it's clear to me that they aren't and so they need to fit next to your franchise player. We need someone who can shoot and defend better than Ivey next to Cade. We also need a Center who can either space the court or defend, and Duren does neither well. You especially need him to space the court if you plan to develop Ausar. Sure, you could play Ivey as sixth man and maybe Duren shares minutes with a spacer or comes off the bench, but that gets to my next point...
We don't have a lot of other assets. @Deleterious asked what we could get for these players individually, and I don't know the answer to that, but I think you have to find out because we really don't have many other assets that can be packaged to improve this team. It's not that I dislike J&J and wouldn't want to see them on my team in some capacity. It's simply that they're both young and still have "potential", which is one of the few things you can sell to improve this roster. That clock is ticking though, so you'd have to do it this offseason.
In regards to whether or not this franchise is capable, I doubt it. That's why you need to clean house (GM and Coach both).