Because Grunwald is a genuis!
When Grunwald came in as interim GM last offseason, what was our biggest need? Defense. He quickly installed Chandler and a bunch of other defensive assets (JJ, Shump) into the roster and improved on our biggest need.
Last season, what was our biggest problems? Ball movement & chemistry. If he re-signs Lin (which i think he will) we have 3 guards capable of starting at PG and running an offense. The chemistry aspect is certainly being underlooked by plenty of posters here. Nearly all players signed this offseason are on 3 year deals, which is appropriate for developing chemistry.
1. Jason Kidd was one of the best PG's available on the market and already has proven chemistry with Chandler and will bring many other intangibles to our squad.
2. Felton has prior experience with STAT and also played with Camby and Kurt Thomas. Did I mention he also shared the back court at times with Jr Smith in Denver?
All of the above will be able to walk in and find chemistry fairly quickly with many of our players. Our starting front court is a 3 headed monster that feeds heavily on ball movement & a capable PG, we will be able to feed it as much as it needs.
One more very important aspect that people are overlooking is how injury plagued we were last playoff's, anyone ever stop and think 'sh!t maybe Grunwald is stopping it from happening again?'. The fact was that we lost both our starting (Lin) & backup PG (Davis) to injury. Even if this happens we will still have one of Felton/Lin/Kidd and Priogoni still on the roster. Injuries happen, and I strongly believe Grunwald is providing a solid protection against this.
"B-bbbbbut the Knicks FO won't want to pay the luxury tax if we keep Lin". Newsflash, the Knicks FO get paid to do their job and are smarter than most of us here for a reason. No matter how much luxury tax we pay, the revenue Lin brings in will be higher.
So to break it down:
Lin's revenue - Luxury tax payments = still a profit for Knicks
So essentially, the only outcome we get my matching Lin's offer (even if he doesn't turn out) is that we make money.