No offense (pun intended), but if you watched the games last year and thought "man, Fred just isn't very good", then you really don't know much about football. Not many RBs could be successful in that situation with that o-line, those QBs and those coaches. That's why objective fans were actually excited to see what Fred could do with a better supporting cast and some decent coaching this year.
Why do you keep bringing up the fact that he's 34? You do realize he has less career carries than McCoy, right?
Everyone's entitled to their opinion, and I guess that's what's good about a public message board, but I can't disagree with your assessment enough about this being a good football and/or business decision. The guy can still flat out ball. And the money he makes is paltry in the grand scheme of things, especially with all the workarounds available with contracts.