#1 He SHOULD MOVE up so that NXT can replenish its ranks.

Cole has been in NXT for about four years. The usual stint is around two years. Performers that are practically ready-made for the main roster, like Roode or McIntyre, had shorter runs in NXT.
While he has helped to anchor the brand, the best part of NXT is that it is always evolving. NXT features high-flying stars, strong-style fighters, and ready-made main-roster wrestlers. It just has a different blend of talent compared to RAW and SmackDown.
When stars are promoted to the main roster from NXT, it opens spots up for other performers. That sometimes translates to more TV time for an underused star or time for a new debut. If Cole moves up to RAW or SmackDown, it would open up a spot in the NXT main event.
If a star like Cameron Grimes becomes a main-event performer, then his spot in the mid-card needs to be filled. Wrestlers like Trey Baxter, Carmelo Hayes and Tyler Rust have shown promise in their limited showings. Rust had more matches than Hayes and Baxter as the other two are likely to be used on 205 Live.
Ari Sterling has primarily competed on the purple brand but has the skills to transcend the division. His addition would improve the NXT Cruiserweight division. Joe Gacy and Josh Briggs are also waiting at the WWE PC and each competed in Evolve.
NXT UK is also loaded with talent that could join the black-and-gold brand. Mark Andrews seems like someone who should have already been Cruiserweight Champion.
He's been a part of the South Wales Subculture alongside Flash Morgan Webster. One or both of those men could feasibly join NXT. Imperium and the Grizzled Young Veterans have already joined the black-and-gold brand. Even Tyler Bate had a run in NXT before returning to NXT UK.
The simple nature of WWE and NXT is that NXT helps to mould the stars for WWE. Some have moved up to the main roster and have had success. Others were not so lucky.
There are different minds in charge of the main roster, so call-ups have varying degrees of success. If Cole moves on from NXT, it will allow other stars to both move up the ranks while trying to make their mark.