We all know the Yankees have refused to sign the best player on the free agent market because they have learned their lesson about long term contracts. The Yankees have now applied that time worn wisdom by signing a player on the wrong side of 30 with a long injury history, and who is at best a mid-, not top-, level major leaguer, to a seven year contract. Let's not forget that he's also a legs guy whose own team did not even try to resign him.
The Yankees have learned that when you sign older, injury prone, but proven players—players like Nick Johnson, Kevin Youkilledus, and Travis Hafner—they always provide above average major league production for a healthy part of the season. Granted, their healthy part of the season does not extend past April, but that's besides the point.
With this signing, the Yankees are out of the Beltran sweepstakes. Beltran has his own health issues (knees), but has stayed in the line-up and is a very productive hitter. The Yankees were reluctant to give Beltran a third year, and have instead opted to do the responsible thing and sign an injury prone Ellsbury for seven years.
If this reminds you of letting a productive Ibanez go in favor of an always injured Hafner, it should. The better option was easily within reach and the Yankees chose the worse one. Why? Because Brian Cashman is not a very good GM. He's just not.
He knows how to close deals, but with Yankee money that's not exactly hard to do and he consistently makes bad personnel decisions while speaking out of turn publicly about far better players who are both more productive and durable. Let's not forget he's been in full charge of baseball operations for some time and our minor league system hasn't produced any high impact players during that time, except maybe an 8th inning reliever. Great.