A lot goes into that. There were health concerns at Tackle and the obvious constraints of a 53 man roster and 45 active on game day.
If Allen sucked so hard at blocking and wasn't contributing to the passing game, the Pats could easily have had Croston among the game-day actives every week and sat Allen. It would've had no effect on the injury situation at tackle.
But forget his blocking we didn't even have someone else to back up Gronk. BB is master of using guys best traits. Again they did just fine the year before without Allen.
Right, and BB used Allen for his blocking - but, yeah, forget about that. And, in 2016, the Pats had Bennett (who
was a very good blocker, BTW). And, once Gronk got hurt they had to use a combo of Fleming, Develin and Lengel as the blocking TE - because they didn't have a guy like Allen to anchor TE blocking assignments (and they were fortunate to have acquired Lengel a little over a week before Gronk got hurt.
That was last year's problem, you tell me how we get more out of TE2 and TE3 while paying Allen what he's set to make this year? And god for bid Gronk gets hurt.
"TE3" has never been a "receiving backup" to TE1 for the Pats. It's always been a blocking position, and didn't matter if the guy in that spot couldn't catch much at all. Allen fulfilled that role just fine in 2017.
The source of your expectations of Allen, and of your disillusionment, seems like it must be the fact that Allen did put up decent receiving production in Indy and didn't last season with the Pats. The thing is, the fact that he
didn't last season, doesn't guarantee that he
won't be better next season.
As far as the cap-cost/benefit relationship goes, it's not particularly difficult to restructure his contract via an extension that provides him with guaranteed money (something he doesn't currently have) while simultaneously reducing both his 2018 and 2019 cap hits by a significant amount.