Barkley has not played at all for the troubled Toffees this season after suffering a nasty hamstring problem in the summer, and he may not turn out for his boyhood club ever again after rejecting a lucrative contract offer in the summer.
The 23-year-old was chased by both Chelsea and Tottenham during the summer transfer window and almost left Goodison Park for Stamford Bridge on deadline day, only to have a last-minute change of heart and back out of the £35m ($39.5m) move.
Barkley would be able to sign a pre-contract agreement with an overseas club or leave Everton on a presumably cut-price deal in January, but Allardyce, who has distanced himself from the vacant Goodison Park hotseat, thinks the 22-time England international has been poorly advised by his agent, who he believes told Barkley that he could earn more than what was offered by Everton and Tottenham.
"It's all about money, isn't it?" Allardyce told talkSPORT. 'Everton are not offering me [Barkley] enough money, my boyhood club that have given me the opportunity to play in the first team'.
"I think they [Everton] made him, they said at the time, the best offer they could possibly make him, which he refused on the basis probably that his agent said, 'I can get you more than that somewhere else'. And that didn't materialise in the end.
"A move to Tottenham, I believe, broke down on the basis of the money, that they wouldn't pay the demand from Barkley's agent at the time and he's left in limbo.
"He's putting his career in severe danger here. If Chelsea don't come in, or they don't offer the sort of money they're looking for, what does he do then? Football is a very short career and this promising young player, his career is stalled at the moment.
"He needs to get back to playing football, and wherever the contract is and whatever the money is, surely it's going to be enough this time to either stay at Everton or move on."
Everton interim boss David Unsworth recently revealed that he will try to convince Barkley to sign a new contract on Merseyside, but it remains to be seen if 'Rhino' can persuade his fellow Evertonian that his future lies at Goodison Park.
Chelsea did sign midfielder Danny Drinkwater on deadline day after being rejected by Barkley, who apparently underwent a medical with the West London outfit, but Antonio Conte's men are prepared to reignite their interest in the former Leeds United loanee in January. They are also interested in Crystal Palace forward Christian Benteke, who may overcome a knee injury in time to face Everton after the international break.