I'm with you. If he was that good and wasn't hurt, why didn't he play more? I think that's a fair statement.
We don't know what the thinking was as to why he didn't play more, so it is all speculation. It is possible that they see a lot of potential in Woods (who can't with his athletic ability) and felt he wasn't ready to be a full or part time contributor on defense last season. They witness his progression in person, nearly every day, so maybe he is now putting it together mentally and using the technique the coaches would like to see.
We, the outsiders, have no idea, but pointing to last year and saying they obviously don't feel up on him doesn't look at the situation as a progression. Players aren't really static, most are either improving or losing ability.
That being said, Woods is only now entering his third year on the team. I wouldn't realistically hope for anything more than a solid rotational player from him right now and that may be all he is capable of.