And what makes you think they'll re-invest that cash in new players?

Part of it, yes, but i'm pretty sure that big part of these money will be used somewhere else, just like they did with the money they got for Shevchenko.
If you didn't notice, Berlusconi isn't investing in Milan anymore lately.
Galliani said it himself: "The club have debts and a good club should know how to settle them on their own, without running to their owners."
Milan are paying huge money for wages, they lost quite a lot for not playing in CL and they are forced to sell their best players. It's been going on for the last 3-4 years, when Berlusconi stopped financing the club the way he did in the past. And especially with the current world crisis, when Berlusconi most probably lost a lot of money, it's hard to expect from him to invest in the team.
After that they sold Sheva and now they have to sell Kaka. In the past it was impossible to even imagine Milan selling it's best players.