Let's try to consider just the facts for a minute.
1. Lotto is leading out the sprint on the left side of the road.
2. Kristoff then opens up the sprint and swings right with Bouhanni, then Sagan, Demare and Cav on his wheel
3. Demare then starts passing Sagan on the right with Cav on his wheel, while kristoff continues to move the entire group to the right.
4. As soon as Demare passes Sagan, Sagan moves right to get on his wheel, closing the door on Cav.
5. Cav continues to Sprint though the small gap rather than checking up.
6. Cavendish and Sagan make contact with each other and Cav begins to go down.
7. Sagan's elbow comes out in the direction of Cav with his hands remaining on the handlebars.
And pretty much everyone stops watching here and misses this
8. Demare swings drastically back to the left forcing Bouhanni to grab the brakes hard (you can see this from front and overhead shot)
Now here is what I would do if I were on the race jury (your opinion may vary but that's why it's a jury instead of just one person).
Sagan - relegation to back of group for irregular sprint. No time penalty; no points penalty other than no longer receiving the points he would've had for second today.
Demare - relegation to back of group for irregular sprint. No time penalty; no points penalty other than no longer receiving the points he would've had for the win today.
ABSOLUTELY NO NEED TO DQ ANYONE FROM THE TOUR FOR WHAT HAPPENED IN THE SPRINT - Even if it had been someone with history like Bouhanni, or a complete no-name that had taken out Cav it still was just a racing incident in my judgement.