I've been out of the loop for the last week or so. I got on to Royals Review yesterday and saw that Jason Frasor had been DFA'ed. My initial reaction was much the same as yours - WTF? Then I looked at his stats. I continued to think - WTF? ...for multiple reasons. At any rate, there's more going on here than what shows on the surface. Let's break it down.
The Royals bullpen is super stacked
Jason Frasor moves up the relief depth chart for almost any other team. He was, apparently, fungible for the Royals. This is known.
Jason Frasor's current ERA is a mirage
Naturally, this fact was noticed quickly. Frasor was sporting a 1.54 ERA/4.02 FIP/4.60 xFIP. That's a big difference in a small sample size. Easy peasy.
The main driver for the high FIP were his strikeout rate and walk rate. The last time Frasor had a K-BB percent like he did in 2015 was 2008, when he threw 47.1 innings of 4.18 ERA/4.55 FIP/4.84 xFIP for replacement-level performance. The main difference between 2008 and 2015, in terms of ERA, was his left on base rate. He stranded 90 percent of runners compared to 77.1 percent last year.
It's tough to pinpoint the reasons for the increased walk rate and decreased strikeout rate. One commenter in the news article noted that Frasor has been leaving pitches up, which seems to be true. Brooks Baseball's zone profiles are down (DRAT!!!!), but Fangraphs has some zone profiles too. Their zone profiles show pitches being left up and a more spread distribution.
It doesn't look like there is a huge difference, but we're talking in small sample sizes here. I looked for any changes in repertoire, too. Essentially, there's very little. Frasor was favoring his slider and splitter over his fastball a little more than last year, but there was not really a velocity or movement difference among any of his pitches. His whiff rate was a little down on his fastball; his whiff rate was way up on his splitter; and his whiff rate on his slider was way down. He used his slider and splitter almost equally, so the whiff rates kind of offset each other.
There might be something in his plate discipline stuff that says, "You know what? Jason Frasor was more hittable this year." Hitters increased their swing rates in 2015, and most of that increase was on pitches in the zone. Hitters also had an increased contact rate against him in 2015, and most of that increase was on pitches in the zone. Hitters, overall, were less fooled by his stuff.
Other teams saw through the mirage
So we know his performance wasn't quite that great. However, given his performance last year in a larger sample, more-or-less acceptable performances going back as far as 2009, and a dirt-cheap veteran salary, wouldn't his market have been better? It's trade season, so shouldn't there be an infinite number of contenders willing to give up something for a cheap, veteran reliever who might be due for a dead cat bounce (in both directions)? Well...no, apparently.
His 2015 xFIP was the third highest of his career, but his second highest xFIP was 4.61. I don't consider 4.60 to be significantly different than 4.61. It looks like teams caught on to the "Frasor is hittable now" narrative and were not willing to give up anything to try to get Frasor.
Frasor is also 37, soon to be 38. That's not a good predictor of rebounding performance.
Market pressures were not in the Royals' favor
The Royals' situation is flush with pitchers. They may not be the best pitchers, but they are warm bodies who throw baseballs. Much of this stuff was pointed out in the comments of the news article. Franklin Morales and Brandon Finnegan (I guess) are needed as the lefty bullpen guys who can go more than one inning. Joe Blanton will be pushed into the long relief role when Yordano Ventura makes his return. Kris Medlen seems to be on track to return, and Medlen is very likely a better pitcher. Ventura, Danny Duffy, Jeremy Guthrie, Edinson Volquez, Chris Young, and Jason Vargas are capable of starting, and that is a list of six guys. The bullpen consists of Greg Holland, Wade Davis, Kelvin Herrera, Luke Hochevar, Ryan Madson*, Franklin Morales, Brandon Finnegan, and Joe Blanton. That's a list of eight guys. So I just named 14 pitchers total without accounting for Medlen's return. Someone was going to be pushed out, and the Royals opted to keep the pitchers (Finnegan, Blanton) who can go more than one inning. Someone else still has to be pushed out when Medlen is ready...
*I'd like to note that I forgot about Ryan Madson in the first draft of this article. Ryan Madson has been good. This goes back to my first point - the bullpen is so stacked that you forget about some of the stacks.
I thought about saying something along the lines of, "Oh, and the timing of everybody's return meant the team had a short time to make a decision". But that's crap. The Royals should have been prepared for this scenario and were probably shopping Frasor. However, if teams realize that the roster situation facing the Royals necessitates a release if a trade doesn't materialize, teams will wait for the release. Also, I refer you to the "Jason Frasor is hittable now" narrative.