He's 30 now and his numbers have trended downwards for the past handful of years. He's not that cornerstone player people thought he would be anymore. Varejo actually makes a nice pairing next to Hibbert and they gain a 1st rounder.
It's not that bad of a deal.
The only downside I see for Indy is that Varejao's deal is partially guaranteed ($4m) for the 2014-2015 season if he breaks down yet again and he has a 5% trade kicker that brings his salary up from $9m this year to $9.5m.
The difference in salary between him and #19 vs. Granger is a few million, which helps them resign West.
That #19 may play into their plans to package their 1st, #23, with Gerald Green ($3.5m / 2 seasons) to clear more cap room.