First and foremost, to answer your question, I agree that York is a terrible wrestler. He is clumsy at times, his finisher isn't crisply executed enough to be believable, and his promos don't really seem polished enough for a 16 year vet.
BUT, he does have major upside potential. He has a very cut look, he's over with the crowd, and he's just the type of guy that TNA needs. Now. I'm sure that you are wondering that I mean by that last tidbit. It plain and simply means that easily gains the crowd favor as a face. And that makes him and excellent target to help build a solid heel figure in Kenny King. Remember, if you will, when Austin Aries was the X-division champ. He was a heel without any solid faces to help make the crowd despise him. So he was often cheered and got a mixed reaction that left those who did not know him wondering what to do when he was in the ring. So they decided to play to his face side and built it up through a feud with an established heel in Bully Ray. King is less known that Aries and wasn't really getting much of a reaction when he debuted. Now, they have York to play off of, which will help King to become a strong heel figure by feuding with the lovable underdog in York.
Other benefits of having York on the roster is that, while his execution is not what it should be, he has probably developed keen eye from working with several different styles worldwide that will enable him to be able to coach and develop young talent. And before you rake me over the coals for saying that, remember that mediocre players in all major sports leagues are usually the ones who make the best coaches(Herm Edwards, Joe Torre, Scott Brooks, etc.) and what you may be looking at is what will be TNA's ex trainer for OVW or agent for the main roster in the X-Division, as the division hasn't had a true X-division agent since the departure of Jerry Lynn. And while York is not Lynn, he still is fairly young and still able to work the ring regularly for angles.
So while has so many negatives that make it seem like his signing was a head scratches, the intangibles that he can provide actually make it quite the smart signing, especially at a bargain basement price. And while I will be cringing from his poor execution the whole way, I look forward to seeing what him being on the roster will hold for the future.