I don't like Shonn Greene very much, but if you are wondering why the Titans do here it is from John Glennon:
Chris Johnson, for everything that he does well, has never been good at picking up third and short. That has been an offensive line issue as much as a CJ issue the last couple of years, but he wasn't good at it before.
The only way that I am good with them giving Grenne a contract is if it has basically no guaranteed money on it. That way they can still draft a back in the middle rounds and can cut Greene if the other guy is better in camp.