It's not just me, everyone scoring matches (here and in the media) have been giving out the 5s. He no longer has the pace to roam all over the pitch and still be effective, but he wants to play like he's still 25. He can't. He could still be a very effective player (likely in midfield, I agree with your 3rd sentence/assertion) if he would accept the role and be disciplined. But he wants to play "hero ball" and just do whatever the hell he wants. It's doing nobody any good.
Sigurdsson with space to operate (and no Rooney on the pitch) was much more effective creating for others than Rooney has been all season. Still not convinced the two can play together, but we haven't really tried Rooney playing in midfield behind Sigurdsson.
So...we should try that before we give up completely. But Sigurdsson is part of the near-medium future of Everton, and it's more important to get him settled than it is to play out sentimental fantasies. If Rooney can't play with Sigurdsson, it's clear who needs to be dropped (from a footballing standpoint).