It certainly doesn't make financial sense, but if the coaching staff feels that there is little chance of EJ winning the starting job in camp, then there is little reason to keep him (and based on last year's camp, EJ doesn't have a chance in hell). We aren't auditioning for the backup position.
The ironic thing is that if EJ was picked in the 3rd round, this wouldn't even be an issue. But because he was overdrafted, fans have deluded themselves into thinking there's a pot of gold at the end of the rainbow -- we just have to be patient. "It's Marrone's fault," "It's Hackett's fault," "You can't judge a QB after 14 games," are all prime examples of the wishful thinking that's spouted ad nauseam.
I would be surprised if he is cut, but I would understand.